FORM 11-K
Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 


 

FORM 11-K

 


 

ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

(MARK ONE)

 

x Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934

 

For the fiscal year ended December 31, 2004

 

Or

 

¨ Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934

 

For the transition period from                      to                     

 

Commission file number 1-5231

 


 

A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

 

McDonald’s Corporation Profit Sharing and Savings Plan

 

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

 

McDonald’s Corporation

McDonald’s Plaza

Oak Brook, Illinois 60523

 



Table of Contents

 

McDonald’s Corporation Profit Sharing and Savings Plan

 

Table of Contents

 

(a)    Financial Statements and Supplemental Schedules

   

Report of Independent Registered Public Accounting Firm

  1

Statements of Net Assets Available for Benefits, December 31, 2004 and December 31, 2003

  2

Statement of Changes in Net Assets Available for Benefits, Year ended December 31, 2004

  4

Notes to Financial Statements

  5

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

  21

Schedule H, Line 4j - Schedule of Reportable Transactions

  40

(b)    Exhibits

   

Exhibit 23 – Consent of Independent Registered Public Accounting Firm

   


Table of Contents

 

FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES

 

McDonald’s Corporation Profit Sharing and Savings Plan

December 31, 2004 and 2003, and Year Ended December 31, 2004


Table of Contents

 

McDonald’s Corporation Profit Sharing and Savings Plan

 

Financial Statements and Supplemental Schedules

 

December 31, 2004 and 2003, and Year Ended December 31, 2004

 

Contents

 

Report of Independent Registered Public Accounting Firm

   1

Financial Statements

    

Statements of Net Assets Available for Benefits

   2

Statement of Changes in Net Assets Available for Benefits

   4

Notes to Financial Statements

   5

Supplemental Schedules

    

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

   21

Schedule H, Line 4j – Schedule of Reportable Transactions

   40

 


Table of Contents

Report of Independent Registered Public Accounting Firm

 

The Administrative Committee

McDonald’s Corporation Profit Sharing and Savings Plan

 

We have audited the accompanying statements of net assets available for benefits of McDonald’s Corporation Profit Sharing and Savings Plan (the Plan) as of December 31, 2004 and 2003, and the related statement of changes in net assets available for benefits for the year ended December 31, 2004. These financial statements are the responsibility of the Plan’s Administrative Committee. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2004 and 2003, and the changes in its net assets available for benefits for the year ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.

 

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of assets (held at end of year) as of December 31, 2004, and reportable transactions for the year then ended, are presented for purposes of additional analysis and are not a required part of the financial statements, but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.

 

Ernst & Young LLP

 

May 19, 2005

Chicago, Illinois

 

1


Table of Contents

 

McDonald’s Corporation Profit Sharing and Savings Pla n

 

Statement of Net Assets Available for Benefits

 

December 31, 2004

(In Thousands)

 

     Participant -
Directed
Investments


    ESOP

   Total

 
       Allocated
Account


    Unallocated
Account*


  

Assets

                               

Cash overdraft

   $ (797 )   $ —       $ —      $ (797 )

Investments, at fair value:

                               

Commercial paper and other short-term investments

     32,128       4,484       4,667      41,279  

Mutual funds

     196,042       —         —        196,042  

Common and preferred stocks other than McDonald’s Corporation

     149,505       —         —        149,505  

Securities loaned through securities lending arrangement:

                               

Common and preferred stocks other than McDonald’s Corporation common stock

     23,910       —         —        23,910  

McDonald’s Corporation common stock

     630,051       228,456       215,098      1,073,605  

Participant loans

     18,145       —         —        18,145  

Pooled Cash Collateral Account

     35,792       —         —        35,792  

Investments, at contract value:

                               

Investment contracts

     381,136       —         —        381,136  

Securities loaned through securities lending arrangement:

                               

Investment contracts

     12,167       —         —        12,167  
    


 


 

  


Total investments

     1,478,876       232,940       219,765      1,931,581  

Receivables:

                               

Company contributions

     36,008       —         —        36,008  

Accrued income

     194       5       7      206  

Other

     402       (121 )     —        281  
    


 


 

  


Total receivables

     36,604       (116 )     7      36,495  
    


 


 

  


Total assets

     1,514,683       232,824       219,772      1,967,279  

Liabilities

                               

Management and administrative expenses payable

     2,116       38       —        2,154  

Accrued interest expense

     —         —         2,847      2,847  

Obligation for collateral received for loaned securities

     35,792       —         —        35,792  

Notes payable

     —         —         93,386      93,386  

Other liabilities

     78       —         279      357  
    


 


 

  


Total liabilities

     37,986       38       96,512      134,536  
    


 


 

  


Net assets available for benefits

   $ 1,476,697     $ 232,786     $ 123,260    $ 1,832,743  
    


 


 

  


 

* Nonparticipant-directed investment (see Note 4).

 

The accompanying notes are an integral part of these financial statements.

 

2


Table of Contents

 

McDonald’s Corporation Profit Sharing and Savings Plan

 

Statement of Net Assets Available for Benefits

 

December 31, 2003

(In Thousands)

 

    

Participant-

Directed
Investments


    ESOP

  

Total


 
     Allocated
Account


    Unallocated
Account*


  

Assets

                               

Cash overdraft

   $ (24 )   $ —       $ —      $ (24 )

Investments, at fair value:

                               

Commercial paper and other short-term investments

     36,930       3,851       3,341      44,122  

Mutual funds

     147,726       —         —        147,726  

Common and preferred stocks other than McDonald’s Corporation

     154,157       —         —        154,157  

McDonald’s Corporation common stock

     519,831       204,291       184,862      908,984  

Participant loans

     16,652       —         —        16,652  

Investments, at contract value:

                               

Investment contracts

     387,536       —         —        387,536  
    


 


 

  


Total investments

     1,262,832       208,142       188,203      1,659,177  

Receivables:

                               

Company contributions

     32,757       —         —        32,757  

Accrued income

     106       4       5      115  

Other

     830       (715 )     —        115  
    


 


 

  


Total receivables

     33,693       (711 )     5      32,987  
    


 


 

  


Total assets

     1,296,501       207,431       188,208      1,692,140  

Liabilities

                               

Management and administrative expenses payable

     1,797       44       —        1,841  

Accrued interest expense

     —         —         2,878      2,878  

Notes payable

     —         —         101,281      101,281  

Other liabilities

     274       80       —        354  
    


 


 

  


Total liabilities

     2,071       124       104,159      106,354  
    


 


 

  


Net assets available for benefits

   $ 1,294,430     $ 207,307     $ 84,049    $ 1,585,786  
    


 


 

  


 

* Nonparticipant-directed investment (see Note 4).

 

The accompanying notes are an integral part of these financial statements.

 

3


Table of Contents

 

McDonald’s Corporation Profit Sharing and Savings Pla n

 

Statement of Changes in Net Assets Available for Benefits

 

Year Ended December 31, 2004

(In Thousands)

 

    

Participant-

Directed
Investments


    ESOP

    Total

 
       Allocated
Account


    Unallocated
Account*


   

Net investment income

                                

Dividend income

   $ 15,617     $ 3,986     $ 3,772     $ 23,375  

Interest income

     19,250       36       24       19,310  

Commission recapture income

     57       4       —         61  

Securities lending income

     21       —         —         21  

Net realized and unrealized appreciation in fair value of investments

     175,246       54,394       50,940       280,580  

Interest expense

     —         —         (7,019 )     (7,019 )

Management and administrative fees

     (4,349 )     (454 )     —         (4,803 )
    


 


 


 


Total net investment income

     205,842       57,966       47,717       311,525  

Contributions

                                

Company

     49,804       7,336       8,212       65,352  

Participant

     40,573       —         —         40,573  
    


 


 


 


Total contributions

     90,377       7,336       8,212       105,925  

Allocations

                                

Company matching with profit sharing forfeitures

     (2,047 )     —         —         (2,047 )

Company matching with ESOP shares

     —         —         (16,718 )     (16,718 )
    


 


 


 


Total allocations

     (2,047 )     —         (16,718 )     (18,765 )

Other changes

                                

Benefits paid to terminated participants and withdrawals

     (130,407 )     (21,989 )     —         (152,396 )

Interfund transfers (net)

     17,830       (17,830 )     —         —    

Other

     672       (4 )     —         668  
    


 


 


 


Total other changes

     (111,905 )     (39,823 )     —         (151,728 )
    


 


 


 


Net increase in net assets available for benefits

     182,267       25,479       39,211       246,957  

Net assets available for benefits at beginning of year

     1,294,430       207,307       84,049       1,585,786  
    


 


 


 


Net assets available for benefits at end of year

   $ 1,476,697     $ 232,786     $ 123,260     $ 1,832,743  
    


 


 


 


 

* Nonparticipant-directed investment (see Note 4).

 

The accompanying notes are an integral part of the financial statements.

 

4


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McDonald’s Corporation Profit Sharing and Savings Pla n

 

Notes to Financial Statements

 

December 31, 2004 and 2003 and Year Ended December 31, 2004

 

1. Description of the Plan

 

Effective January 1, 2002, the McDonald’s Corporation Profit Sharing Program was amended and restated in its entirety and renamed the McDonald’s Corporation Profit Sharing and Savings Plan (the Plan). The Plan is funded by the McDonald’s Corporation Profit Sharing and Savings Trust (the Trust), effective December 31, 2001. The features of the Plan are 401(k) (which includes the participant contributions, as well as the employer match), Profit Sharing (which includes Investment Savings accounts, which were in effect prior to 1987), ESOP, Stock Sharing (which consists of accounts, which were in effect prior to 1996), and Rollover. The Plan has five amendments effective January 1, 2002 (2 amendments), June 1, 2002, November 27, 2002, and March 31, 2003.

 

On December 22, 2004, the McDonald’s Corporation Profit Sharing and Savings Plan was amended and restated in its entirety effective January 1, 2005. The McDonald’s Corporation Profit Sharing and Savings Trust was amended and restated in its entirety on December 22, 2004, to create the McDonald’s Corporation Profit Sharing and Savings Master Trust (Master Trust) effective January 1, 2005. The newly restated Master Trust will fund both the McDonald’s Corporation Profit Sharing and Savings Plan and a new plan, the McDonald’s Venture 401(k) Plan effective January 1, 2005 (see Note 11 concerning subsequent events).

 

The Plan is administered by a committee of individuals (Administrative Committee) appointed by the Chief Executive Officer of McDonald’s Corporation (the Company). Participants should refer to the Summary Plan Description and Prospectus for a more complete description and up-to-date information.

 

Record Keeping

 

The Plan’s recordkeeper in 2003 was Northern Trust Retirement Consulting (NTRC) until June 13, 2003, when NTRC was purchased by Hewitt Associates LLC.

 

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Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Notes to Financial Statements (continued)

 

1. Description of the Plan (continued)

 

Eligibility

 

In order to participate in the 401(k) feature of the Plan, all eligible employees must be at least 21 years of age, have a valid Social Security number, and be on the U.S. payroll of the Company or Boston Market, Chipotle, or Donatos (collectively, Venture Employers).

 

Effective December 4, 2003, Donatos employees were no longer eligible employees because the Company sold its ownership interest in Donatos. Full-time, salaried restaurant management employees, staff, executives, and part-time staff scheduled to work at least 20 hours per week are eligible to make nonmatched 401(k) contributions beginning the first day of the month after completing one full calendar month of employment. Crew and hourly paid employees are eligible after one year of “eligible service” as defined by the Plan documents. After meeting the eligibility requirements, participants can contribute up to 15% of their pay. After one year of eligible service, the Company match is 100% on the first 3% of pay contributed and 50% on the next 2% of pay contributed. Additionally, eligible McDonald’s staff and restaurant management employees, who have met the above match eligibility requirements and who have completed 1,000 hours of service and are on the payroll at year-end, are also eligible for Profit Sharing and ESOP contributions. Employees of Venture Employers can participate in the Profit Sharing and ESOP features if the Company allows the Venture Employers to adopt these features. As of December 31, 2004, no Venture Employer has adopted the Profit Sharing or ESOP features.

 

Investments and Elections

 

The investment funds under the Plan are Stable Value Fund, Blended Stock/Bond Fund, International Stock Fund, S&P 500 Index Fund, Diversified Stock Fund, Aggressive Stock Fund (effective August 1, 2003), Company Stock Fund, and the McDonald’s ESOP Stock Fund.

 

The Trustees, individuals appointed by the Board of Directors of McDonald’s Corporation (the Board), are authorized to invest certain assets of the Plan in shares of Company stock. The allocated ESOP shares are held by The Northern Trust Company. The unallocated ESOP shares are also held at The Northern Trust Company as custodian for shares held as collateral for loans by McDonald’s Corporation and Wachovia Bank. Other than pass through dividends, proceeds from the ESOP common stock dividends are invested in an interest-bearing account until the note payment is due.

 

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McDonald’s Corporation Profit Sharing and Savings Plan

 

Notes to Financial Statements (continued)

 

1. Description of the Plan (continued)

 

Participants can elect, on a daily basis, to have their 401(k), ESOP, and Profit Sharing account balances, as well as future deferrals, Company matching contributions, ESOP contributions, and profit-sharing contributions invested in 1% increments in one or any combination of the Plan’s investment funds, including Company stock. ESOP contributions, 401(k) contributions, and Company match, where the participant fails to make an investment direction, are automatically invested in Company stock. Profit Sharing accounts are invested in the Blended Stock/Bond Fund if a participant does not make an investment election.

 

Any dividends or other distributions paid on Company stock owned by the Plan (see Note 6 regarding ESOP stock dividends) are used to repay the ESOP loans, and common stock equal to the value of the dividends on allocated shares are transferred from unallocated shares and allocated to participants’ accounts.

 

Allocation of Contributions and Earnings

 

Profit Sharing contributions are determined by the Board. The Board may elect to make this discretionary contribution in the form of cash or McDonald’s common stock or any combination of the two. In 2004 and 2003, the Profit Sharing contribution was made in cash and was allocated to eligible McDonald’s staff and restaurant management who were 21 years old, received credit for at least 1,000 hours of service during the year, and were employed at the end of the year. In addition, participants who terminated employment before the last day of the year due to death, disability, or retirement on or after age 55 share in the allocation of the Profit Sharing contribution in the year their employment terminates. The allocation to participants is based on their respective considered compensation as defined in the Plan compared to all eligible participants’ considered compensation. The year-end contribution is invested the day it is posted to participants’ accounts.

 

Participant deferrals are credited directly to participants’ accounts. Company matching allocations are credited based on the Safe Harbor match (100% match on the first 3% of pay contributed and 50% on the next 2% of pay contributed) for all eligible participants, regardless of job class or employer. The match is credited to participant accounts after each pay period.

 

Net investment income or loss for all accounts was allocated to participants each day that the stock market was open. Participants’ accounts were credited with the income, gains, and losses of the investment fund(s) in which their accounts were invested.

 

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Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Notes to Financial Statements (continued)

 

1. Description of the Plan (continued)

 

Individuals that are employed as a salaried restaurant management employee or staff with a licensee-owned restaurant that is purchased by McDonald’s or a Venture Employer and are at least age 21 may enter the 401(k) feature of the Plan as soon as administratively feasible and be eligible for the Company match. If McDonald’s purchased the restaurant, the individuals described above will automatically enter the Profit Sharing and ESOP features of the Plan and receive two years of credited service toward vesting unless considered a “highly paid” employee. “Highly paid” employees will receive the lesser of two years credited service or actual years of employment.

 

Leveraged Employee Stock Ownership Plan (Leveraged ESOP)

 

In September 1989, the Leveraged ESOP borrowed $200 million and used the proceeds of the loan to purchase 27,826,084 shares of McDonald’s Series B convertible preferred stock at an issue price of $7.188 per share. These preferred shares were held exclusively by the Leveraged ESOP and were not traded on the open market. The Company paid a cash dividend on the stock of 7% of the issue price, or $0.12579 per share each quarter.

 

In September 1992, the Company redeemed 16,000,000 shares of unallocated Series B preferred shares held by the Leveraged ESOP. In August 1995, the Company redeemed the remaining 6,230,058 unallocated Series B preferred shares, and in December 1995, the remaining 4,176,122 allocated Series B preferred shares were redeemed.

 

Prior to each redemption, the Plan’s Trustees converted each share of preferred stock into 0.7692 shares of McDonald’s common stock, or 12,307,200, 4,792,159, and 3,212,271 shares, respectively. The unallocated shares will be released for allocation to participants as the Company’s contributions are made to the Plan. Effective November 1, 1998, released shares are first used to make matching allocations, and any remaining shares released are allocated annually to eligible participants’ accounts based on their respective considered compensation. Due to the Leveraged ESOP refinancing discussed in Note 5, the last allocation will occur in 2018 when the refinanced loan is completely repaid.

 

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McDonald’s Corporation Profit Sharing and Savings Plan

 

Notes to Financial Statements (continued)

 

1. Description of the Plan (continued)

 

In April 1991, the Leveraged ESOP borrowed $100 million and used the proceeds of the loan to purchase 12,075,468 shares of McDonald’s Series C convertible preferred stock at an issue price of $8.281 per share. These preferred shares were held exclusively by the Leveraged ESOP and were not traded on the open market. The Company paid a cash dividend on the stock of 7% of the issue price or $0.1449 per share each quarter. In August 1995, the Company redeemed the remaining 8,928,110 unallocated Series C preferred shares, and in December 1995, the remaining 2,710,514 allocated Series C preferred shares were redeemed. Prior to each redemption, the Plan’s Trustees converted each share of preferred stock into 0.8 shares of McDonald’s common stock or 7,142,486 and 2,168,409 shares, respectively. The unallocated shares will be released for allocation to participants as the Company’s contributions are made to the Plan. Effective November 1, 1998, released shares are first used to make matching allocations, and any remaining shares released are allocated to eligible participants’ accounts based on their respective considered compensation. Due to the 1999 Leveraged ESOP refinancing discussed in Note 5, the last allocation will occur in 2018 when the refinanced loan is completely repaid.

 

Vesting

 

401(k) accounts and the Company’s matching contributions are fully vested and nonforfeitable regardless of the participant’s length of employment with the Company. Effective January 1, 2000, for employees who are active on or after that date, within Profit Sharing and ESOP accounts, participants vest 20% for each year of credited service until they reach a 100% vested status after completing five years of credited service.

 

Diversification

 

Effective March 31, 2003, participants can elect to fully diversify all accounts in the Plan, regardless of age. Prior to March 31, 2003, ESOP account balances could not be diversified from Company stock until age 50. Participants at least age 50 were eligible to diversify all accounts under the Plan.

 

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McDonald’s Corporation Profit Sharing and Savings Plan

 

Notes to Financial Statements (continued)

 

1. Description of the Plan (continued)

 

Termination and Forfeitures

 

Participants who terminate their employment with the Company and all Venture Employers are entitled to receive the vested interest in their Plan accounts within a reasonable time following their termination. The nonvested balance is forfeited at the end of the year in which the participant has five consecutive breaks-in-service, or upon distribution of the vested balance, whichever is earlier. If a participant does not terminate but has less than 500 hours of credited service during a calendar year, a break-in-service occurs. Participants who terminate employment after satisfying the requirements to make deferrals and subsequently rehire can resume making deferrals as soon as administratively feasible. Individuals who are reemployed before incurring five consecutive one-year breaks-in-service and were not fully vested in their Profit Sharing or ESOP account will have the amount previously forfeited restored upon rehire. Individuals rehired after five consecutive one-year breaks-in-service will not have any forfeitures on their Profit Sharing or ESOP account reinstated. An individual’s years of vesting service earned before reemployment are added to their years of vesting service earned after reemployment.

 

Forfeitures are first used from all accounts (other than ESOP) to fund the Company’s matching contributions.

 

ESOP forfeitures are allocated at the end of the calendar year to participants in the same manner as the allocation of any Company Profit Sharing or ESOP contributions.

 

Forfeitures also include amounts forfeited as a result of unclaimed payouts greater than two years old for Profit Sharing, ESOP, and the 401(k) and Company matching contributions.

 

A terminated participant with vested benefits in excess of $5,000 will not receive a distribution from the Plan until age 70 ½ unless an earlier distribution is elected. Such accounts will continue to share in the allocation of investment income, and accounts will continue to be invested in accordance with the participant’s investment elections (see Note 1, Investments and Elections).

 

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McDonald’s Corporation Profit Sharing and Savings Plan

 

Notes to Financial Statements (continued)

 

1. Description of the Plan (continued)

 

Rollovers

 

The Plan allows employees who were in a tax-qualified plan elsewhere to roll over all or part of their previous plan money into the Plan where it can be invested in one or a combination of the Plan’s investment funds. To qualify, the employee must contribute all or part of the amount received, excluding the employee’s after-tax contributions, to the Plan within 60 days after receiving a payout from the other plan. Employees can roll over their money (excluding employees’ after-tax money) into the Plan from previous employers’ tax qualified plans, tax deferred annuities, qualified employee annuities, deferred compensation arrangements maintained by a governmental employer, as described in Internal Revenue Code (IRC) Section 457(e)(16), and rollover individual retirement accounts established with the proceeds of a distribution from one of the plans described above provided that additional contributions had not been made.

 

In-Service Withdrawals

 

Participants who have been in the Plan for at least 60 months are eligible to withdraw up to 75% of their ESOP and Profit Sharing accounts while still employed with the Company or Venture Employers. Participants may only make one withdrawal in a calendar year, in regards to Profit Sharing and ESOP. Participants can elect to receive all or any part of their Investment Savings and Stock Sharing account balances either while still employed or after termination. Participants 59 ½ or older may withdraw all or any part of their account balances under the Plan at any time.

 

Pass Through Dividend Election

 

Participants are offered the choice of having dividends earned on shares in the McDonald’s Stock Fund paid directly to them in cash or reinvested in their accounts in McDonald’s common stock.

 

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McDonald’s Corporation Profit Sharing and Savings Plan

 

Notes to Financial Statements (continued)

 

1. Description of the Plan (continued)

 

Loans

 

Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested balance reduced by the participants’ highest outstanding loan balance during the preceding 12-month period. All loans are subject to a $60 processing fee. Loan terms range from 12 months up to 4.5 years. Participants may not have more than one loan from the Plan outstanding at any time. The loans are secured by the balance in the participant’s account and bear interest based on the prime rate in effect on the first day of the month in which the loan is processed, plus 1%. Principal and interest are paid ratably through payroll deductions.

 

Voting

 

Participants are entitled to direct the Trustees in voting shares of McDonald’s stock credited to their accounts. In addition, participants who are employees may direct the vote on unallocated and unvoted shares based on the relative allocated shares credited to their accounts.

 

Plan Termination

 

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). In the event of Plan termination, participants will become fully vested in their accounts.

 

2. Summary of Significant Accounting Policies

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires the Administrative Committee to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 

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McDonald’s Corporation Profit Sharing and Savings Plan

 

Notes to Financial Statements (continued)

 

2. Summary of Significant Accounting Policies (continued)

 

Investment Valuation

 

Investments (except for those in insurance contracts) are stated at fair market value. Investments in common and preferred stocks and corporate bonds are valued at the closing exchange prices reported by the New York Stock Exchange. The market values for commercial paper and other short-term investments are cost plus accrued interest, which approximates current market value. The insurance contracts are stated at contract value, which represents cost plus accrued interest less withdrawals.

 

Purchases and sales of securities are accounted for on the trade date. Realized gains or losses on the sale of securities are based on the average cost of the securities. Dividend income is recorded on the ex-dividend date. Interest income is recorded as earned on the accrual basis.

 

Company Contributions

 

Profit Sharing and ESOP contributions are recorded in participants’ accounts when received annually. The 401(k) Company matching allocations and participant elected salary reductions are recorded in participants’ accounts at the end of the applicable payroll period.

 

Unallocated Net Assets Available for Benefits

 

Unallocated net assets available for benefits represent the market value of shares of McDonald’s common stock purchased through the ESOP, which has not been released for allocation to participants’ accounts offset by the balance of the debt issued by the ESOP. Unallocated net assets available for benefits are reduced by the market value of the shares as they are allocated to participants.

 

13


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McDonald’s Corporation Profit Sharing and Savings Plan

 

Notes to Financial Statements (continued)

 

3. Investments

 

During 2004, the Plan’s investments (including investments bought, sold, and held during the year) appreciated as follows (in thousands):

 

Common stocks other than McDonald’s Corporation

   $ 13,559

Mutual funds

     15,630

McDonald’s Corporation common stock

     251,391
    

     $ 280,580
    

 

The fair value of individual investments that represent 5% or more of the Plan’s assets available for benefits is as follows (in thousands):

 

     December 31

 
     2004

    2003

 

McDonald’s Corporation common stock

   $ 1,073,605 *   $ 908,984 *

Synthetic Guaranteed Investment Contracts (at contract value):

                

Pacific Life Insurance Company

     102,148       97,395  

UBS AG

     —         81,708  

 

* Includes nonparticipant directed (see Note 4).

 

14


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McDonald’s Corporation Profit Sharing and Savings Plan

 

Notes to Financial Statements (continued)

 

3. Investments (continued)

 

The following is a summary of each investment contract held at December 31, 2004:

 

     2004
Average
Yield


    2003
Average
Yield


    2004
Crediting
Interest
Rate*


    2003
Crediting
Interest
Rate*


    Book
Value


   Fair
Market
Value


   Fair
Value of
Wrapper


 

Bank of America

   4.03 %   10.78 %   4.98 %   6.92 %   $ 13,873,156    $ 14,178,068    $ (304,912 )

Bank of America

   4.48     2.94     4.76     1.27       45,736,325      46,462,914      (726,589 )

JP Morgan Chase

   4.60     3.61     3.90     1.39       48,345,216      49,495,468      (1,150,252 )

Monumental Life Insurance Co.

   4.29     3.24     4.21     1.26       51,647,464      52,279,485      (632,021 )

Pacific Life Insurance Company

   4.88     5.69     4.87     5.69       102,147,569      104,723,330      (2,575,761 )

Principal Life Insurance Company

   4.73     4.73     4.71     5.21       42,839,522      45,519,796      (2,680,274 )

State Street Bank & Trust

   4.39     2.78     4.34     2.43       46,982,195      47,748,728      (766,533 )

UBS AG

   4.00     3.12     4.13     3.46       41,731,498      42,226,762      (495,264 )
                            

  

        
                             $ 393,302,945    $ 402,634,551         
                            

  

        

 

* The crediting interest rate is determined at the end of each calendar year.

 

15


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McDonald’s Corporation Profit Sharing and Savings Plan

 

Notes to Financial Statements (continued)

 

4. Nonparticipant-Directed Investments

 

Prior to March 31, 2003, the allocated ESOP consisted of participant-directed investments as well as nonparticipant-directed investments as participants under age 50 could not diversify these investments. As of March 31, 2003, participants could elect to fully diversify all accounts in the Plan, regardless of age or service; therefore, the allocated ESOP became fully participant directed. The unallocated ESOP, as disclosed in the “Unallocated Account” column on pages 2 through 4 of the basic financial statements, consists solely of nonparticipant-directed investments.

 

5. Notes Payable

 

In September 1989, the Leveraged ESOP issued $200 million of 7.67% Guaranteed ESOP Notes, Series A, for 15 years with a final maturity of September 15, 2004. In April 1991, the Leveraged ESOP issued $100 million of 7.30% Guaranteed ESOP Notes, Series B, for 15 years with a final maturity of June 1, 2006. In November 1999, the Leveraged ESOP paid down $84,740,000 of these notes and refinanced both the Series A and Series B notes. At that time, the Leveraged ESOP issued a $104,672,800, 7.11% ESOP Note for 19 years with a final maturity of July 15, 2018, and a $28,305,658, 7.11% ESOP Note for 3 years with a final maturity of July 15, 2002. Principal and interest payments are made according to the applicable loan schedules. Dividends on the converted common stock and the Company’s contributions are used to repay the loans.

 

In December 1994, the Leveraged ESOP issued a total of $17,460,000 of 6.52%, 6.59%, and 6.57% Guaranteed ESOP Notes, Series C, with final maturities of September 15, 2004, June 1, 2006, and December 1, 2005, respectively. In November 1999, $8,684,656 of these notes were paid down, leaving a total of $8,775,344 remaining. In December 1995, the Leveraged ESOP issued a total of $18,970,000 of 6.74%, 6.75%, 6.72%, and 6.68% Guaranteed ESOP Notes, Series C, with final maturities of December 1, 2004 and 2005, September 15, 2004, and December 15, 2003, respectively. In November 1999, $11,771,030 of these notes were paid down, leaving a total of $7,198,970 remaining. In December 1996, the Leveraged ESOP issued a total of $20,220,000 of 6.82%, 6.75%, and 6.77% Guaranteed ESOP Notes, Series C, with final maturities of December 1, 2004, December 15, 2002, and December 15, 2003, respectively. In November 1999, $14,181,859 of these notes were paid down, leaving a total of $6,038,141 remaining. In December 1997, the Leveraged ESOP issued a total of $18,350,000 of 6.89%, 6.86%, and 6.81% Guaranteed ESOP Notes, Series C, with final maturities of December 1, 2004,

 

16


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McDonald’s Corporation Profit Sharing and Savings Plan

 

Notes to Financial Statements (continued)

 

5. Notes Payable (continued)

 

December 1, 2003, and December 15, 2002, respectively. In November 1999, $13,600,913 of these notes were paid down, leaving a total of $4,749,087 remaining. All proceeds were used for prepayment of the Series A and B Guaranteed ESOP Notes. The terms of the Series C Notes require semiannual interest payments with lump-sum principal payments at maturity date.

 

The Series A/B and Series C Notes are collateralized by unallocated shares of McDonald’s common stock, valued at $202,484,000 and $12,614,000, respectively, at December 31, 2004. All notes are guaranteed by the McDonald’s Corporation. Holders of the notes have no recourse against the assets of the ESOP, except for such collateralized shares, cash contributions to the ESOP, and earnings attributable to such collateralized shares or contributions, which were valued at approximately $215,098,000 at December 31, 2004. The unallocated shares of McDonald’s common stock may be released from collateral under certain circumstances without the consent of the holders of the notes.

 

Following are maturities of the notes for each of the next five years and beyond (in thousands):

 

     Series A
Notes


   Series B
Notes


   Series C
Notes


   Total

2005

   $ 1,164    $ 586    $ 5,203    $ 6,953

2006

     3,314      1,669      2,300      7,283

2007

     5,100      2,570      —        7,670

2008

     5,217      2,628      —        7,845

2009

     5,291      2,666      —        7,957

Beyond 2009

     37,026      18,652      —        55,678
    

  

  

  

Total over remaining life of notes

   $ 57,112    $ 28,771    $ 7,503    $ 93,386
    

  

  

  

 

17


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McDonald’s Corporation Profit Sharing and Savings Plan

 

Notes to Financial Statements (continued)

 

6. Administrative Fees

 

The custodian and investment managers’ fees applicable to each investment fund are netted against the related investment income before investment income is allocated to participants’ accounts. Certain administrative expenses directly associated with the Plan are paid by the Plan and charged to participants’ accounts, including salary expenses for certain Company employees. The Company provides other administrative services to the Plan without charge.

 

7. Income Tax Status

 

The Plan has received a favorable determination letter dated October 15, 2004, from the Internal Revenue Service (the IRS) stating that the Plan is qualified under Section 401(a) of the IRC and that the ESOP component of the Plan constitutes an employee stock ownership plan that meets the requirements of Section 4975 of the IRC. The Trust established in connection with the Plan appears to be exempt from federal income taxes.

 

8. Transactions With Parties in Interest

 

During 2004 and 2003, the Plan received $18,600,000 and $14,668,000, respectively, in common stock dividends from the Company. In connection with the Leveraged ESOP refinancing discussed in Note 5, $132,978,458 of debt, at an interest rate of 7.11%, was issued directly by the Company to the Plan in 1999. This loan is intended to be an exempt loan under Section 408(b)(3) of ERISA and Section 4975(d)(3) of the IRC. Fees paid during the year for accounting and other services rendered by parties in interest were based on customary and reasonable rates for such services.

 

9. Risks and Uncertainties

 

The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of net assets available for benefits.

 

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McDonald’s Corporation Profit Sharing and Savings Plan

 

Notes to Financial Statements (continued)

 

10. Securities Lending

 

The Plan increases its investment income by lending the Plan’s securities, through the trustee, to independent third parties. When the Plan lends securities, it is subject to a risk of failure by the borrower to return the loaned securities or a delay in delivery of the securities, in which case the Plan may incur a loss. To limit this risk, such loans are contractually required to be continuously secured by the collateral consisting of cash, cash equivalents, or U.S. Treasury bonds in an amount at least equal to the market value of the securities loaned. As of December 31, 2004, $36,076,589 of the Plan’s securities reported on the statement of net assets available for benefits were on loan, which were secured by collateral with a market value of $36,840,854. At December 31, 2004, $1,048,641 of noncash collateral was not required to be reported in the financial statements.

 

11. Subsequent Events

 

Effective January 1, 2005, a separate plan was created entitled the McDonald’s Ventures 401(k) Plan (Ventures Plan) for employees of Boston Market and Chipotle. As of that date, employees of Boston Market and Chipotle are no longer eligible to participate in the Plan. Assets approximating $40,040,000 were transferred from the Plan to the Ventures Plan. A master trust was also created at this time in which both the Plan and the Ventures Plan are participating plans.

 

Also, effective January 1, 2005, the Plan was amended and restated in its entirety to make the following changes to the Plan:

 

Eligibility

 

  A. Salaried restaurant management employees and staff employees who are in the supervisory/consulting band or below (including part-time staff employees) who are age 21 and older are eligible to begin participating in the Plan on the first day of the month on or after completing one month of service at a nonmatched level.

 

  B. Staff employees in the management advisory band and executives are not eligible to participate in the non-matched feature.

 

  C. Salaried restaurant management employees will automatically be enrolled in the 401(k) feature at a 1% contribution level, unless they elect otherwise.

 

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McDonald’s Corporation Profit Sharing and Savings Plan

 

Notes to Financial Statements (continued)

 

11. Subsequent Events (continued)

 

  D. After meeting eligibility requirements, participants can contribute up to 50% of their pay as a 401(k) contribution, subject to IRS annual limits.

 

  E. A participant who reaches age 50 or over by the end of a calendar year is eligible for additional catch-up contributions of $4,000 in 2005, indexed for future years.

 

  F. The Company’s matching contribution was increased to 300% on the first 1% of pay contributed and 100% on the next 4% of pay contributed.

 

Investments and Elections

 

Participant’s 401(k) contributions are automatically invested in the Blended Stock/Bond Fund if a participant fails to make an investment election.

 

Allocation of Contributions and Earnings

 

  A. A discretionary Profit Sharing match of up to 4% of eligible pay in 2005 may be allocated on participant 401(k) contributions for participants who contribute up to 1% of pay. Any discretionary match will be made after the end of the calendar year.

 

  B. Profit Sharing contributions and separate ESOP allocations were discontinued after the 2004 allocation was made in January 2005.

 

Vesting

 

All accounts under the Plan are 100% vested. Credited service for licensee owned restaurants applies only to eligibility service.

 

Terminations and Forfeitures

 

A terminated participant with vested benefits in excess of $1,000 will not receive a distribution from the Plan until age 70 ½ unless an earlier distribution is elected.

 

Pass Through Dividend Election

 

Participants are offered the choice of having dividends earned on shares of McDonald’s common stock paid directly to them in cash or reinvested in their accounts in McDonald’s stock.

 

20


Table of Contents

 

Supplemental Schedules

 


Table of Contents

 

McDonald’s Corporation Profit Sharing and Savings Pla n

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year)

 

EIN #36-2361282         Plan #001

 

December 31, 2004

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

   Current Value

The Northern Trust Company*:

                  

Coltv Short Term Invt Fund

   41,278,641    $ 41,278,641    $ 41,278,641

Noninterest-bearing cash

   35,792,213      35,792,213      35,792,213

Corporate Stock – Preferred:

                  

Forest Cy Enterprises Inc

   1,000      —        57,800
                

Total Corporate Stock – Preferred

                 57,800

Corporate Stock – Common:

                  

Ace Cash Express Inc

   6,125      —        181,667

Adobe Sys Inc

   10,200      —        639,948

ADR Cadbury Schweppes PLC

   17,900      —        674,830

ADR Elan Corp PLC

   3,260      —        88,835

ADR Koninklijke Philips Electrs N V

                  

N Y Registry SH New 20

   58,150      —        1,540,975

ADR NDS Group PLC

   1,181      —        40,247

ADR Nice Sys LTD

   4,650      —        145,498

ADR Novartis

   26,500      —        1,339,310

ADR Rhodia

   26,650      —        71,955

ADR Roche Hldg LTD

   12,100      —        1,392,921

ADR Sanofi-Aventis

   42,865      —        1,716,743

ADR SAP Aktiengesellschaft

   27,800      —        1,229,038

ADR Stolt Offshore Com

   14,709      —        95,608

ADR Total SA

   9,300      —        1,021,512

Advance Amer Cash Advance Ctrs Inc

   2,450      —        56,105

Advanced Micro Devices Inc

   8,870      —        195,317

Aeroflex Inc

   13,825      —        167,559

Affiliated Managers Group Inc

   7,465      —        505,679

Agilent Technologies Inc

   40,500      —        976,050

 

21


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McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282         Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

   Current
Value


Corporate Stock – Common (continued):

                  

AK Stl Hldg Corp

   12,152    $ —      $ 175,839

Alamosa Hldgs Inc

   7,890      —        98,388

Alcon Inc

   8,700      —        701,220

Allegheny Energy Inc

   1,205      —        23,751

Allegheny Technologies Inc

   11,211      —        242,942

Allergan Inc

   9,400      —        762,058

Alliance Data Sys Corp

   3,280      —        155,734

Alltel Corp

   4,600      —        270,296

Altria Group Inc

   30,100      —        1,839,110

Amer Express Co

   28,000      —        1,578,360

American Tower Corp

   5,380      —        98,992

Amerigroup Corp

   1,250      —        94,575

Ameritrade Hldg Corp

   7,310      —        103,948

Amern Cap Strategies Ltd Com

   7,875      —        262,631

Amern Eagle Outfitters Inc

   2,090      —        98,439

Amern Intl Group Inc

   38,287      —        2,514,307

Amern STD Cos Inc Del Com

   3,070      —        126,852

Amgen Inc

   20,700      —        1,327,905

Anteon Intl Corp

   5,585      —        233,788

Apple Computer Inc

   28,560      —        1,839,264

Applied Digital Solutions Inc

   4,514      —        30,469

Aquantive Inc

   5,600      —        50,064

Archer-Daniels-Midland Co

   58,850      —        1,312,943

Ariba Inc

   7,970      —        132,302

Arris Group Inc

   21,300      —        149,952

Ashland Inc

   1,900      —        110,922

Ask Jeeves Inc

   16,495      —        441,241

Auto Data Processing Inc

   1,000      —        44,350

 

22


Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282         Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

   Current
Value


Corporate Stock – Common (continued):

                  

Avatar Hldgs Inc

   200    $ —      $ 9,620

Avid tech Inc

   4,275      —        263,981

Axonyx Inc

   9,593      —        59,477

Aztar Corp

   2,475      —        86,427

Banknorth Group Inc

   3,800      —        139,080

Bard C R Inc

   4,160      —        266,157

Bausch & Lomb Inc

   3,050      —        196,603

Baxter Intl Inc

   42,750      —        1,476,585

BE Aerospace Inc

   20,296      —        236,245

Bear Stearns Cos Inc

   1,920      —        196,435

Beckman Coulter Inc

   5,350      —        358,396

Becton Dickinson & Co

   500      —        28,400

Bed Bath Beyond Inc

   27,460      —        1,093,732

Bellsouth Corp

   59,150      —        1,643,778

Belo Corp

   5,400      —        141,696

Benchmark Electrs Inc

   6,905      —        235,460

Beverly Enterprises Inc

   5,213      —        47,699

Biomet Inc

   4,130      —        179,201

BJ Svcs Co

   2,010      —        93,545

BK Amer Corp

   61,800      —        2,903,982

BK Haw Corp

   1,200      —        60,888

Bostonfed Bancorp Inc

   200      —        9,054

Boyd Gaming Corp

   2,000      —        83,300

Brocade Communications Sys Inc

   21,650      —        165,406

Brookline Bancorp Inc Del

   2,100      —        34,272

BSTN Pvt Finl Hldgs Inc

   6,250      —        176,062

CDW Corp

   2,680      —        177,818

Calamos Asset Mgmt Inc

   5,685      —        153,495

 

23


Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

   Current
Value


Corporate Stock – Common (continued):

                  

Capitalsource Inc

   11,885    $ —      $ 305,088

Caremark RX Inc

   26,600      —        1,048,838

Carrier Access Corp

   7,280      —        77,750

Caterpillar Inc

   10,300      —        1,004,353

CB Richard Ellis Group Inc

   9,275      —        311,176

CDN Pac Ry LTD

   1,800      —        61,938

Cendant Corp

   90,200      —        2,108,876

Cent Pac Finl Corp

   507      —        18,338

Champion Enterprises Inc

   11,967      —        141,450

Charles Riv Assocs Inc

   3,850      —        180,064

Checkfree Corp New

   5,130      —        195,350

Chemed Corp

   625      —        41,944

Chicos Fas Inc

   31,720      —        1,444,212

Choicepoint Inc

   2,840      —        130,612

Cisco Sys Inc

   56,200      —        1,084,660

Citigroup Inc

   64,350      —        3,100,383

Citrix Sys Inc

   5,490      —        134,670

City Natl Corp

   1,480      —        104,562

Clear Channel Communications Inc

   42,300      —        1,416,627

Clorox Co

   2,210      —        130,235

CMS Energy Corp

   2,410      —        25,184

Cnet Networks Inc

   13,260      —        148,910

Coach Inc

   18,320      —        1,033,248

Cogent Inc

   2,880      —        95,040

Cognizant Tech Solutions Corp

   5,110      —        216,306

Comcast Corp

   61,792      —        2,056,438

Comm Bancshares Inc

   1,366      —        68,573

Computer Assoc Intl Inc

   7,500      —        232,950

 

24


Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

   Current
Value


Corporate Stock – Common (continued):

                  

Comversetech Inc

   9,660    $ —      $ 236,187

ConocoPhillips

   20,214      —        1,755,182

Conseco Inc

   8,950      —        178,552

Constellation Brands Inc

   1,960      —        91,160

Cooper Cos Inc

   1,970      —        139,062

Corporate Executive Brd Co

   2,410      —        161,325

Corrections Corp Amer

   1,306      —        52,828

Costco Whsl Corp New

   11,400      —        551,874

Countrywide Finl Corp

   2,698      —        99,853

Covance Inc

   5,775      —        223,781

Crompton Corp

   10,667      —        125,871

Cross Ctry Healthcare Inc

   1,978      —        35,762

Cryptologic Inc

   4,120      —        102,794

Crystallex Intl Corp

   10,485      —        37,641

CSX Corp

   11,600      —        464,928

Cubist Pharmaceuticals Inc

   4,100      —        48,503

CV Therapeutics Inc

   3,485      —        80,155

Cybersource Corp

   8,116      —        58,029

Cymer Inc

   5,170      —        152,722

Cypress Semiconductor Corp

   1,775      —        20,821

Dade Behring Hldgs Inc

   1,740      —        97,440

Deere & Co

   23,700      —        1,763,280

Dell Inc

   37,800      —        1,592,892

Delta Airlines Inc

   5,174      —        38,702

Dennys Corp

   11,994      —        53,973

Diamond Cluster

   19,500      —        279,435

Digital Angel Corp

   3,760      —        29,065

Digitas Inc

   22,268      —        212,659

 

25


Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

   Current
Value


Corporate Stock – Common (continued):

                  

Dillards Inc

   18,000    $ —      $ 483,660

Dominion Res Inc

   18,150      —        1,229,481

Donnelley RR & Sons Co

   22,550      —        795,789

Doral Finl Corp

   2,320      —        114,260

Dreamworks Animation Inc

   3,930      —        147,414

Dril-Quip Inc

   3,290      —        79,815

E* Trade Fin Corp

   15,250      —        227,987

Eastman Chem Co

   1,520      —        87,750

Eastman Kodak Co

   4,800      —        154,800

Eaton Corp

   1,330      —        96,239

Ebay Inc

   22,400      —        2,604,672

ECI Telecom LTD

   5,811      —        47,470

El Paso Corp

   464      —        4,826

Electr Arts

   30,800      —        1,899,744

Electronics Boutique Hldgs Corp

   2,325      —        99,835

Eli Lilly & Co

   20,800      —        1,180,400

Endologix Inc

   12,401      —        84,699

Engineered Support Sys Inc

   2,785      —        164,928

Entergy Corp

   20,300      —        1,372,077

Eon Labs Inc

   12,775      —        344,925

Epicor Software Corp

   19,990      —        281,659

Expeditors Intl Wash Inc

   2,430      —        135,788

Exxon Mobil Corp

   38,750      —        1,986,325

Eyetech Pharmaceuticals Inc

   2,100      —        95,550

FBL Finl Group Inc

   1,700      —        48,535

Fedt Dept Stores Inc

   5,000      —        288,950

Felcor Lodging Tr Inc

   2,477      —        36,288

Firstfed Finl Corp

   200      —        10,374

Fiserv Inc

   1,890      —        75,959

Fisher Scientific Intl Inc

   4,260      —        265,739

Fording CDN Coal Tr

   1,160      —        89,494

 

26


Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

   Current
Value


Corporate Stock – Common (continued):

                  

Forest Cy Enterprises Inc

   1,000    $ —      $ 57,550

Formfactor Inc

   5,375      —        145,877

Foster Wheeler LTD

   1,939      —        30,772

Freeport Mcmoran C & G

   17,550      —        670,936

Freescale Semiconductor Inc

   33,798      —        620,531

Furniture Brands Intl Inc

   5,500      —        137,775

F5 Networks Inc

   6,165      —        300,359

Gamestop Corp

   450      —        10,062

Gannett Inc

   3,300      —        269,610

Gaylord Entmt Co

   6,650      —        276,174

Gen Elec Co

   120,650      —        4,403,725

Genentech Inc

   24,000      —        1,306,560

Genzyme Corp

   3,670      —        213,117

Gevity HR Inc

   7,425      —        152,658

Gilead Sci Inc

   30,000      —        1,049,700

Glaxo SmithKline Spons ADR

   31,100      —        1,473,829

Global Inds LTD Com

   14,624      —        121,233

Global Pmts Inc

   7,965      —        466,271

Global Pwr Equip Group Inc

   2,579      —        25,377

GNT Prideco Inc

   4,120      —        82,606

Goldman Sachs Group Inc

   18,550      —        1,929,942

Google Inc

   7,400      —        1,428,940

Great Lakes Chem Corp

   2,628      —        74,872

Grey Wolf Inc

   9,759      —        51,430

Halliburton Co

   18,750      —        735,750

Hanover Compressor Co

   7,135      —        100,818

Harman Intl Inds Inc

   6,550      —        831,850

Harrahs Entmt Inc

   2,600      —        173,914

Harsco Corp

   2,375      —        132,383

HBR Fla Bancshares Inc

   300      —        10,383

 

27


Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

   Current
Value


Corporate Stock – Common (continued):

                  

HCA Inc

   1,900    $ —      $ 75,924

Healthextras Inc

   5,075      —        82,722

Hercules Inc

   7,377      —        109,548

Hewlett Packard Co

   8,400      —        176,148

Hlth Mgmt Assoc Inc

   5,800      —        131,776

Host Marriott Corp

   6,230      —        107,779

Hyperion Solutions Corp

   6,875      —        320,513

Identix Inc

   8,396      —        61,962

Idex Corp

   3,250      —        131,625

Imax Corp

   7,237      —        59,698

Immucor Inc

   13,275      —        312,095

Impax Lab Inc

   14,630      —        232,324

Inamed Corp

   3,230      —        204,298

Independence Cmnty Bk Corp

   1,600      —        68,128

Indevus Pharmaceuticals Inc

   9,105      —        54,266

Infospace Inc

   2,700      —        128,385

Input/Output Inc

   5,018      —        44,359

Insight Enterprises Inc

   8,795      —        180,473

Integrated Device Tech Inc

   8,375      —        96,815

International Coal Group Inc

   331      —        3,641

Internet Cap Group Inc

   10,585      —        95,265

Intersections Inc

   500      —        8,625

Interwoven Inc

   9,600      —        104,448

Intl Business Machs Corp

   24,300      —        2,395,494

Intl Game Tech

   6,000      —        206,280

Intl Paper Co

   21,950      —        921,900

Intuitive Surgical Inc

   7,340      —        293,747

Jacuzzi Brands Inc

   6,108      —        53,140

James Riv Coal Co

   1,389      —        59,102

Jetblue Awys Corp

   1,950      —        45,279

Journal Register Co

   3,100      —        59,923

JP Morgan Chase & Co

   96,880      —        3,779,289

 

28


Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

   Current
Value


Corporate Stock – Common (continued):

                  

Juniper Networks Inc

   14,640    $ —      $ 398,062

Kanbay Intl Inc

   10,150      —        317,695

Kindred Healthcare Inc

   13,730      —        411,214

KLA-Tencor Corp

   4,450      —        207,281

Knight-Ridder Inc

   4,200      —        281,148

Kronos Inc

   2,575      —        131,660

La Quinta Corp

   27,226      —        247,484

Lab Corp Amer Hldgs

   2,670      —        133,019

Lam Resh Corp

   13,010      —        376,119

Landstar Sys Inc

   2,285      —        168,267

Lauder Estee Cos Inc

   16,300      —        746,051

LCA-Vision Inc

   2,084      —        48,745

LCC Intl Inc

   4,271      —        24,900

Leap Wireless Intl Inc

   2,468      —        66,636

Lee Enterprises Inc

   4,200      —        193,536

Lehman Bros Hldgs Inc

   7,600      —        664,848

Lexmark Intl Inc

   4,700      —        399,500

Liberty Media Corp

   4,900      —        53,802

Liberty Media Intl Inc

   245      —        11,326

Lone Star Technologies Inc

   3,217      —        107,641

Lowes Cos Inc

   35,350      —        2,035,807

Lyondell Chemical Co

   4,450      —        128,694

Macromedia Inc

   4,580      —        142,530

Manor Care Inc

   2,660      —        94,244

Marathon Oil Corp

   41,783      —        1,571,459

Marcus Corp

   200      —        5,028

Marriott Intl Inc New

   5,330      —        335,683

Martek Biosciences Corp

   5,350      —        273,920

Marvell Tech Group Inc

   38,610      —        1,369,497

Masco Corp

   16,800      —        613,704

Maxim Integrated Prods Inc

   19,500      —        826,605

McAfee Inc

   6,620      —        191,517

 

29


Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

  

Current

Value


Corporate Stock – Common (continued):

                  

McClatchy Co

   1,800    $ —      $ 129,258

McCormick & Co Inc

   3,240      —        125,064

McDermott Intl Inc

   6,459      —        118,587

McDonald’s Corporation*

   33,487,366      490,944,939      1,073,604,954

McGraw Hill Companies Inc

   700      —        64,078

McMoran Expl Co

   5,197      —        97,184

MCI Inc

   12,150      —        244,944

Medco Hlth Solutions Inc

   2,600      —        108,160

Media Gen Inc

   1,800      —        116,658

Medicines Company

   3,640      —        104,832

Medimmune Inc

   22,390      —        606,993

Mercantile Bankshares Corp

   1,100      —        57,420

Mercury Interactive Corp

   15,900      —        724,245

Meristar Hospitality Corp

   6,517      —        54,417

Merrill Lynch & Co Inc

   22,100      —        1,320,917

MGI Pharma Inc

   11,910      —        333,599

MGM Mirage

   5,090      —        370,247

Microsemi Corp

   6,375      —        110,670

Microsoft Corp

   135,050      —        3,607,186

Microstrategy Inc

   256      —        23

Microtune Inc

   6,610      —        40,387

Millicom Intl Cellular

   1,361      —        30,936

Monolithic Pwr Sys Inc

   8,625      —        80,213

Monster Worldwide Inc

   8,260      —        277,866

Morgan Stanley

   17,150      —        952,168

Motorola Inc

   16,900      —        290,680

MPS Group Inc

   12,686      —        155,530

MRV Communications Inc

   5,821      —        21,363

MSC Indl Direct Inc

   8,125      —        292,338

Myriad Genetics Inc

   1,827      —        41,126

 

30


Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

   Current
Value


Corporate Stock – Common (continued):

                  

National-Oilwell Inc

   5,900    $ —      $ 208,211

Navigant Consulting Inc

   9,465      —        251,769

Navteq Corp

   9,600      —        445,056

Neurocrine Biosciences Inc

   3,100      —        152,830

New York Times Co

   3,800      —        155,040

Newalliance Bancshares Inc

   3,200      —        48,960

Newpark Res Inc

   9,301      —        47,900

News Corp

   42,400      —        791,184

Nextel Communications Inc

   33,200      —        996,000

NII Hldgs Inc

   2,520      —        119,574

Niku Corp

   4,500      —        90,720

NMS Communications Corp

   3,978      —        25,101

Northn Tr Corp

   2,280      —        110,762

Novatel Wireless Inc

   9,010      —        174,614

Occidental Pete Corp

   17,750      —        1,035,890

OpenTV Corp

   19,750      —        75,840

Openwave Sys Inc

   11,837      —        183,000

Orbital SCI Corp

   3,128      —        37,004

ORD GBP0.01

   4,360      —        114,450

Oscient Pharmaceuticals Corp

   3,646      —        13,308

Overstock Com Inc

   1,430      —        98,670

PF Changs China Bistro Inc

   2,030      —        114,391

Pac Sunwear Cal Inc

   4,725      —        105,179

Pacificare Hlth Sys Inc

   2,720      —        153,734

Partners Tr Finl Group Inc

   5,825      —        67,861

Patterson Cos Inc

   3,140      —        136,245

Paychex Inc

   6,400      —        218,112

Peabody Energy Corp

   930      —        75,246

Pentair Inc

   4,150      —        180,774

Pepsico Inc

   18,850      —        983,970

 

31


Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

   Current
Value


Corporate Stock – Common (continued):

                  

Petco Animal Supplies Inc

   6,950    $ —      $ 274,386

Petsmart Inc

   18,800      —        667,964

Pfizer Inc

   39,100      —        1,051,399

Pharmion Corp

   5,475      —        231,100

Pioneer Drilling Co

   11,825      —        119,314

Piper Jaffray Cos

   3,855      —        184,847

PMA Cap Corp

   7,924      —        82,013

PMC Sierra Inc

   22,120      —        248,850

Polycom Inc

   10,820      —        252,322

Polyone Corp

   8,576      —        77,699

Powerwave Technologies Inc

   11,050      —        93,704

Presstek Inc

   5,109      —        49,455

Price T Rowe Group Inc

   3,790      —        235,738

Priceline Com Inc

   10,520      —        248,167

Procter & Gamble Co

   21,200      —        1,167,696

Provident Finl Svcs Inc

   4,020      —        77,867

Qualcomm Inc

   32,600      —        1,382,240

Quest Software Inc

   10,700      —        170,665

RadioShack Corp

   4,220      —        138,754

Range Res Corp

   12,295      —        251,556

Rare Hospitality Intl Inc

   2,745      —        87,456

Raymond James Fncl Inc

   2,100      —        65,058

Renal Care Group Inc

   7,175      —        258,228

Research In Motion LTD

   11,000      —        906,620

Robert Half Intl Inc

   6,460      —        190,118

Rockwell Automation

   4,430      —        219,507

Roper Inds Inc

   2,480      —        150,710

S W Airlines Co

   12,660      —        206,105

Sanmina-SCI Corp

   24,540      —        207,854

SBA Comm Corp

   11,081      —        102,832

 

32


Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

   Current
Value


Corporate Stock – Common (continued):

                  

Scansource Inc

   1,975    $ —      $ 122,766

Schlumberger Ltd

   25,600      —        1,713,920

Schwab Charles Corp

   57,100      —        682,916

Scientific-Atlanta Inc

   1,600      —        52,816

Scientific Games Corp Inc

   4,840      —        115,386

SEI Invts Co

   1,890      —        79,248

Sepracor Inc

   1,880      —        111,616

Serologicals Corp

   10,925      —        241,661

Service Corp Intl

   3,512      —        26,164

Shaw Group Inc

   5,204      —        92,891

Sigmatel Inc

   2,700      —        95,931

Signature Bk NY

   4,365      —        141,251

Silicon Image Inc

   7,725      —        127,154

Silicon Val Bancshares

   2,200      —        98,604

Sirius Satellite Radio Inc

   42,440      —        324,666

Skyworks Solutions Inc

   10,160      —        95,809

Smith Intl Inc

   1,710      —        93,041

Sonus Networks Inc

   16,730      —        95,863

Sovereign Bancorp Inc

   4,960      —        111,848

Spinnaker Expl Co

   5,335      —        187,098

Sports Auth Inc

   3,800      —        97,850

St Paul Travelers Corp

   39,655      —        1,470,011

STA Casinos Inc

   3,150      —        172,242

Stamps Com Inc

   2,413      —        38,222

Staples Inc

   21,850      —        736,564

Starwood Hotels & Resorts Worldwide Inc

   2,530      —        147,752

Stellent Inc

   10,150      —        89,523

Steris Corp

   2,300      —        54,556

Stewart Enterprises Inc

   5,236      —        36,600

Sun Bancorp Inc

   2,915      —        72,817

Sun Healthcare Group Inc

   2,690      —        24,778

 

33


Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

   Current
Value


Corporate Stock – Common (continued):

                  

Suncor Inc

   6,000    $ —      $ 212,400

Sunterra Corp

   3,890      —        54,616

Superior Energy Svcs Inc

   7,710      —        118,811

Superior Inds Intl Inc

   3,500      —        101,675

Sybase Inc

   3,200      —        63,840

Sybron Dental Specialties Inc

   4,975      —        176,016

Symmetry Med Inc

   5,745      —        120,932

Target Corp

   31,300      —        1,625,409

Teekay Shipping Corp

   2,810      —        118,329

Telesystem Intl Wireless Inc

   2,236      —        25,021

Tenneco Automotive Inc

   3,240      —        55,858

Tibco Software Inc

   30,970      —        413,140

Transocean Inc

   4,220      —        178,886

Trinity Ind Inc

   1,498      —        51,052

Tyco Intl LTD

   51,900      —        1,854,906

Ubiquitel Inc

   7,871      —        56,042

UCBH Hldgs Inc

   2,880      —        131,962

Ultra Pete Corp

   1,770      —        85,190

Ultratech Inc

   4,525      —        85,296

United Parcel Svc Inc

   15,200      —        1,298,992

United Health Group Inc

   9,200      —        809,876

Univision Communications Inc

   24,100      —        705,407

Unizan Finl Corp

   1,800      —        47,430

Unvl Health Services Inc

   1,100      —        48,950

Urban Outfitters Inc

   3,030      —        134,532

US Unwired Inc

   10,968      —        52,646

US Xpress Enterprises Inc

   4,150      —        121,595

USG Corp

   2,638      —        106,232

UTD Therapeutics Corp

   1,631      —        73,640

 

34


Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

   Current
Value


Corporate Stock – Common (continued):

                  

UTI Worldwide Inc

   2,500    $ —      $ 170,050

Varian Semiconductor Equipment Assocs Inc

   3,525      —        129,896

Verisign Inc

   8,500      —        284,920

Veritas Software Corp

   3,800      —        108,490

Viisage Tech Inc

   4,608      —        41,518

Vion Pharmaceuticals Inc

   11,740      —        55,061

W-H Energy Svcs Inc

   2,116      —        47,314

Wabtec Corp

   4,304      —        91,761

Walter Inds Inc

   1,615      —        54,474

Waste Management Inc

   45,950      —        1,375,743

Waters Corp

   3,450      —        161,426

Webster Fncl Corp

   2,500      —        126,600

Wellcare Hlth Plans Inc

   7,475      —        242,938

Wellpoint Inc

   9,220      —        1,060,300

Wells Fargo & Co

   27,650      —        1,718,448

Westn Wireless Corp

   4,590      —        134,487

Whitney Hldg Corp

   2,800      —        125,972

Whole Foods Mkt Inc

   15,200      —        1,449,320

Wiley John & Sons Inc

   2,100      —        73,164

Willbros Group Inc

   2,250      —        51,863

Williams Co Inc

   475      —        7,738

Williams Sonoma Inc

   11,770      —        412,421

Wms Inds Inc

   9,790      —        328,357

Wsfs Finl Corp

   200      —        12,064

Wynn Resorts LTD

   2,050      —        137,186

XM Satellite Radio Hldgs Inc

   10,100      —        379,962

XTO Energy Inc

   4,742      —        167,772

Yahoo Inc

   60,200      —        2,268,336

Yardville Natl Bancorp

   400      —        13,704

 

35


Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

  

Current

Value


Corporate Stock – Common (continued):

                  

Yellow Roadway Corp

   1,830    $ —      $ 101,949

1st Defiance Finl Corp

   2,100      —        59,787

1st Finl Hldgs Inc

   1,900      —        62,206

1st Marblehead Corp

   5,145      —        289,406

1st Niagara Finl Group Inc

   1,500      —        20,925
                

Total Corporate Stock – Common

                 1,246,961,978

Participant loans varying maturities with interest rates ranging from 5% to 5.75%

   —        —        18,145,532

Value of Interest in Registered Investment Companies:

                  

Artisan Fds Inc Intl Fd Inv Shs

   881,105      —        19,507,663

Morgan Stanley Instl Fd Intl Eqty

   984,674      —        20,668,304

Vanguard Instl Index Fd Sh Ben Int

   800,615      —        88,636,070

Wellington Tr Coltv Core Bd Plus

   1,856,415      —        21,200,265

Wellington Tr Coltv Core Eqty

   3,702,516      —        29,472,023

Wellington Tr Coltv Core Intl

   803,004      —        7,981,860

Wellington Tr Coltv Small Cap

   639,963      —        8,575,506
                

Total Value of Interest in Registered Investment Companies

                 196,041,691

Investment contracts:

                  

Investment contracts (excluding Synthetic Guaranteed Investment Contracts):

                  

Principal Life Insurance Co. 4-28950

   42,839,522      —        42,839,522
                

Total investment contracts (excluding Synthetic Guaranteed Investment Contracts)

                 42,839,522

 

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McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

  

Current

Value


 

Investment contracts (continued):

                    

Synthetic Guaranteed Investment Contracts:

                    

Bank of America Wrapper Contract

   —      $ —      $ (726,589 )

Underlying Assets of Synthetic

                    

Guaranteed Investment Contract:

                    

INVESCO Short-Term Bond Fund

   —        —        46,462,914  
                


Bank of America Synthetic Guaranteed Investment Contract

                 45,736,325  

Bank of America Wrapper Contract

   —        —        (304,911 )

Underlying Assets of Synthetic Guaranteed Investment Contract:

                    

U.S. Treasury Note

   —        —        2,504,217  

U.S. Treasury Note

   —        —        2,943,192  

U.S. Treasury Note

   —        —        1,013,760  

U.S. Treasury Note

   —        —        4,650,540  

U.S. Treasury Note

   —        —        1,053,550  

AB-SubPrime Auto

   —        —        1,777,011  

Short-Term Investment Fund

   —        —        235,797  
                


Total Underlying Assets

                 14,178,067  
                


Bank of America Synthetic Guaranteed Investment Contract

                 13,873,156  

JP Morgan Chase Wrapper Contract

   —        —        (1,150,252 )

Underlying Assets of Synthetic Guaranteed Investment Contract:

                    

WAM AAA

   —        —        49,495,468  
                


JP Morgan Chase Synthetic Guaranteed Investment Contract

                 48,345,216  

 

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McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

  

Current

Value


 

Investment contracts (continued):

                    

Synthetic Guaranteed Investment Contracts (continued):

                    

Monumental Life Insurance Co. Wrapper Contract

   —      $ —      $ (632,021 )

Underlying Assets of Synthetic Guaranteed Investment Contract:

                    

INVESCO Intermediate Fund

   —        —        52,279,485  
                


Monumental Life Insurance Co. Synthetic Guaranteed Investment Contract

                 51,647,464  

Pacific Mutual Life Insurance Co. Wrapper Contract

   —        —        (2,575,761 )

Underlying Assets of Synthetic Guaranteed Investment Contract:

                    

PIMCO Funds

   —        —        104,723,330  
                


Pacific Mutual Life Insurance Co. Synthetic Guaranteed Investment Contract

                 102,147,569  

State Street Bank & Trust Wrapper Contract

   —        —        (766,533 )

Underlying Assets of Synthetic Guaranteed Investment Contract:

                    

INVESCO Short-Term Bond Fund

   —        —        47,748,728  
                


State Street Bank & Trust Synthetic Guaranteed Investment Contract

                 46,982,195  

 

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Table of Contents

McDonald’s Corporation Profit Sharing and Savings Plan

 

Schedule H, Line 4i – Schedule of Assets

(Held at End of Year) (continued)

 

EIN #36-2361282        Plan #001

 

Identity of Issuer/Description of Investment


   Number of
Shares or
Par Value


   Cost**

  

Current

Value


 

Investment contracts (continued):

                    

Synthetic Guaranteed Investment Contracts (continued):

                    

UBS AG Wrapper Contract

   —      $ —      $ (495,264 )

Underlying Assets of Synthetic Guaranteed Investment Contract:

                    

AAA Asset Backed Securities

   —        —        42,226,762  
                


UBS AG Synthetic Guaranteed Investment Contract

                 41,731,498  
                


Total Synthetic Guaranteed Investment Contracts

                 350,463,423  
                


Total investment contracts

                 393,302,945  
                


                 $ 1,931,580,800  
                


 

* Party in interest.

 

** Historical cost is disclosed only for nonparticipant-directed investments.

 

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McDonald’s Corporation Profit Sharing and Savings Pla n

 

Schedule H, Line 4j – Schedule of Reportable Transactions

 

EIN #36-2361282        Plan #001

 

Year Ended December 31, 2004

(In Thousands)

 

Identity of Party Involved


 

Description of Asset


   Purchase
Price


   Selling
Price


   Cost of
Asset


   Current Value
of Asset on
Transaction
Date


   Net Gain
(Loss)


Category (iii) – Series of transactions in excess of 5% of plan assets

The Northern Trust Company

  Collective Short Term Fund    $ 625,643    $ —      $ 625,643    $ 625,643    $ —  
           —        617,878      617,878      617,878      —  

McDonald’s Corporation

  McDonald’s Corporation                                   
    Common Stock      16,360      —        16,360      16,360      —  
           —        91,321      46,346      91,321      44,975

 

There were no category (i), (ii), or (iv) reportable transactions during 2004.

 

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SIGNATURES

 

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

 

       

McDONALD’S CORPORATION

       

PROFIT SHARING AND SAVINGS PLAN

       

By:

 

ADMINISTRATIVE COMMITTEE

Date: June 28, 2005       By:   /s/    Michael D. Richard
               

Michael D. Richard

               

Trustee and Member of the

               

Administrative Committee