-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DBQiAIxTVQNNuvkGfEp6R2EUuUOGVt4YAqnjclPv1H/KpwN2fJveq4XCgjxbkQYl GhCPqQwAWk+BakRlfSmi1g== /in/edgar/work/20000728/0000063908-00-000012/0000063908-00-000012.txt : 20000921 0000063908-00-000012.hdr.sgml : 20000921 ACCESSION NUMBER: 0000063908-00-000012 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000725 ITEM INFORMATION: FILED AS OF DATE: 20000728 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCDONALDS CORP CENTRAL INDEX KEY: 0000063908 STANDARD INDUSTRIAL CLASSIFICATION: [5812 ] IRS NUMBER: 362361282 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-05231 FILM NUMBER: 680862 BUSINESS ADDRESS: STREET 1: ONE MCDONALD'S PLZ CITY: OAK BROOK STATE: IL ZIP: 60523 BUSINESS PHONE: 6306233000 8-K 1 0001.txt 8-K REPORT DATED 7/25/00 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 25, 2000 McDONALD'S CORPORATION (Exact name of Registrant as specified in its Charter) Delaware 1-5231 36-2361282 (State of Incorporation) (Commission File No.) (IRS Employer Identification No.) One McDonald's Plaza Oak Brook, Illinois 60523 (630) 623-3000 (Address and Phone Number of Principal Executive Offices) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits - -------------------------------------------------------------------------- (c) Exhibit ------- (99) Press Release dated July 25, 2000 -- McDonald's Reports Global Results SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. McDONALD'S CORPORATION (Registrant) By: /s/ Gloria Santona ---------------------------- Gloria Santona Vice President, U.S. General Counsel and Secretary EX-99 2 0002.txt 8-K EXHIBIT 99 EXHIBIT 99 Investor Release FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT: 07/25/00 Investors: Mary Healy, 630-623-6429 Media: Anna Rozenich, 630-623-7316 McDONALD'S REPORTS GLOBAL RESULTS OAK BROOK, IL -- McDonald's Corporation today announced global results for the quarter and six months ended June 30, 2000. - - Diluted net income per common share was 39 cents for the quarter, an increase of 5%; 8% in constant currencies. For the six months, diluted net income per common share increased 9%; 12% in constant currencies. - - For the first time, Systemwide sales exceeded $10 billion for a quarter, increasing 5% for the quarter and 7% for the six months in constant currencies. - - Revenues increased 8% for the quarter and 10% for the six months in constant currencies. - - The Company repurchased nearly $1.3 billion of stock during the six months. Key highlights - Consolidated 2000 1999 Increase/(Decrease) Dollars in millions, except As In Constant per common share data Reported Currencies* Quarters ended June 30 Systemwide sales $10,237.6 $ 9,920.4 3% 5% Total revenues 3,560.6 3,407.1 5 8 Operating income 876.3 883.5 (1) 2 Net income 525.9 518.1 2 4 Net income per common share - diluted .39 .37 5 8 Six months ended June 30 Systemwide sales $19,744.3 $18,743.2 5% 7% Total revenues 6,904.4 6,442.2 7 10 Operating income 1,644.9 1,595.1 3 6 Net income 976.8 920.8 6 9 Net income per common share - diluted .71 .65 9 12 * Information in constant currencies excludes the effect of foreign currency translation on reported results, except for hyperinflationary economies, such as Russia, whose functional currency is the U.S. dollar. SUMMARY COMMENTARY Chairman and Chief Executive Officer Jack M. Greenberg commented, "McDonald's global food service business delivered good results in the first six months of 2000 with Systemwide sales increasing seven percent, revenues increasing 10 percent and diluted earnings per share increasing 12 percent in constant currencies. Second quarter growth was affected by challenging year-over-year sales comparisons, due to exceptional performance in several key markets in 1999. However, we remain confident that we will regain stronger sales momentum in the second half of the year and improve operating results. This expectation is based on our solid operating fundamentals, strong marketing and promotional calendars, and less challenging comparisons in several key markets in the last half of the year. "We continue to believe McDonald's stock is undervalued and therefore have been an aggressive buyer, purchasing about $700 million, or 19.1 million shares, of our common stock in the second quarter. This brought year-to-date purchases to nearly $1.3 billion and the cumulative purchases under our $4.5 billion, three-year share repurchase program to $2.5 billion, or 70 million shares." Jim Cantalupo, Vice Chairman and President McDonald's Corporation said, "The fundamentals of our business remain very strong. We opened 546 McDonald's restaurants year-to-date and remain on track to add about 1,800- 1,900 this year. "Europe and the U.S., which together comprise about 80 percent of operating income, each faced difficult comparisons driven by exceptionally strong non-food promotions last year. The challenges in Europe were compounded by unusually hot weather and high television viewership of the Euro 2000 Soccer Championship, which reduced eating out activity. With these factors behind us, we expect significant improvement in Europe's results in the second half of the year. "In Asia/Pacific, Japan's new value strategy is beginning to gain momentum. The segment also benefited from outstanding results in China and South Korea, while Australia's challenging comparisons and a drop in retail spending hurt results. In Latin America, we have experienced some improvement in Brazil, although we continue to be adversely affected by difficult economic conditions in most markets. We remain optimistic that we will experience improvement as we progress throughout 2000." Alan Feldman, President McDonald's USA said, "This year's Teenie Beanie Babies was a terrific Happy Meal promotion, ranking as the fourth most successful ever in the United States. However, it did not match last year's exceptional sales level. If it had, U.S. sales would have been up about five percent for the quarter. "I'm excited about our second half marketing calendar featuring our new advertising campaign, 'We Love to See You Smile.' The campaign highlights six customer service initiatives including: faster, more accurate drive-thrus; everyday value offerings; tasty new products; a new system that delivers food 'Hot. Fresh. Just For You!'; a 'Fresh Look' for restaurants including new painting and landscaping; and better trained and motivated people. In addition, we have a great line up of promotions. For example, in August, McDonald's Summer Music Event will offer three new CDs featuring Britney Spears and *NSYNC, as well as other popular artists. And later this year, we'll feature a promotion linked to Disney's live-action movie, 102 Dalmatians. With the improvements we've made in our restaurants and our strong promotions, we look forward to exciting our customers and bringing them back again and again." OPERATING RESULTS McDonald's operates primarily in the quick-service hamburger restaurant business. In addition, the Company operates other restaurant concepts: Aroma Cafe, Chipotle Mexican Grill, Donatos Pizza and, effective May 26th, Boston Market. Collectively these four businesses are referred to as "Other Brands." Throughout this release, Other Brands financial information is included in the Other segment, except where specifically noted. Impact of Foreign Currencies on Reported Results While changing foreign currencies affect reported results, McDonald's lessens exposures, where practical, by financing in local currencies, hedging certain foreign-denominated cash flows and by purchasing goods and services in local currencies. The primary currencies negatively affecting reported results for the quarter and six months were the Euro, which is the currency in 11 of our European markets including France and Germany, the Australian Dollar and the British Pound. This negative effect was partly offset by the stronger Japanese Yen in both periods. Systemwide Sales and Revenues Systemwide sales represent sales by Company-operated, franchised and affiliated restaurants. Total revenues include sales by Company-operated restaurants and fees from restaurants operated by franchisees and affiliates. These fees include rent, service fees and royalties that are based on a percent of sales with specified minimum payments along with initial fees. On a global basis, the increases in sales and revenues for both periods were partly due to expansion, and for the six months, also due to positive comparable sales. Foreign currency translation had a negative effect on the growth rates for both Systemwide sales and revenues for the quarter and six months. The stronger Japanese Yen had a greater positive currency translation effect on sales compared to revenues. This is due to our affiliate structure in Japan. Under this structure, we record a royalty in revenues based on a percentage of Japan's sales, whereas all of Japan's sales are included in Systemwide sales. For this reason, sales were less negatively affected by foreign currency translation than were revenues. On a constant currency basis, revenues increased at a higher rate than sales in both periods due to the higher unit growth rate of Company- operated McDonald's restaurants relative to Systemwide restaurants, the addition of Other Brands and the consolidation of Argentina and Indonesia, for financial reporting purposes, in the first quarter 2000. Systemwide sales Dollars in millions 2000 1999 Increase/(Decrease) As In Constant Reported Currencies* Quarters ended June 30 U.S. $ 5,192.5 $ 5,169.9 - n/a Europe 2,326.8 2,387.3 (3)% 7% Asia/Pacific 1,696.3 1,502.3 13 7 Latin America 429.5 402.1 7 10 Other 592.5 458.8 29 30 Total Systemwide sales $10,237.6 $ 9,920.4 3% 5% Six months ended June 30 U.S. $ 9,697.5 $ 9,453.1 3% n/a Europe 4,632.5 4,649.1 - 10% Asia/Pacific 3,481.9 3,013.6 16 10 Latin America 863.6 795.7 9 11 Other 1,068.8 831.7 29 28 Total Systemwide sales $19,744.3 $18,743.2 5% 7% * Excluding the effect of foreign currency translation on reported results n/a Not applicable U.S. sales were flat for the quarter as expansion was offset by negative comparable sales. If Teenie Beanie Babies sales had equaled last year's level, U.S. sales would have increased about five percent for the quarter. For the six months, U.S. sales increased three percent, due to restaurant expansion and positive comparable sales. In Europe, expansion, partly offset by negative comparable sales, drove the constant currency sales increase for the quarter, while expansion and positive comparable sales drove the increase for the six months. Strong performances in Italy, the Netherlands and Spain drove the increases in both periods. France and the United Kingdom also contributed significantly to the increases for both periods. The segment's sales growth rate was negatively impacted by difficult sales comparisons in Germany as a result of successful non-food promotions in 1999, unusually hot weather and high television viewership of the Euro 2000 Soccer Championship, which reduced eating out activity. In Asia/Pacific, the constant currency sales increase for the quarter was driven by expansion, partly offset by negative comparable sales, while the sales growth for the six months was driven by expansion and positive comparable sales. Positive comparable sales in several markets, including double-digit comparable sales growth in China, and expansion in Japan drove the segment's sales increases in both periods. In Latin America, constant currency sales increases for the quarter and six months were driven by expansion, partly offset by negative comparable sales. Contributing to the increases were expansion for both periods and positive comparable sales in Brazil for the six months, and double-digit comparable sales in Mexico for both periods. In the Other segment, positive comparable sales and expansion in Canada and South Africa contributed to the increases for both periods. The sales increases for the quarter and six months included $106.1 million and $149.3 million, respectively, related to the addition of Other Brands. Combined Operating Margins The following combined operating margin information represents margins for McDonald's restaurant business only. Combined operating margins Quarters ended Six months ended June 30 June 30 2000 1999 2000 1999 Dollars in millions Company-operated $ 428.2 $ 448.9 $ 831.5 $ 810.0 Franchised 783.6 792.6 1,493.3 1,469.8 Combined operating margins $1,211.8 $1,241.5 $2,324.8 $2,279.8 Percent of sales/revenues Company-operated 17.3% 18.4% 17.0% 7.6% Franchised 80.1 81.5 79.4 80.4 Combined operating margin dollars decreased $29.7 million, or two percent, for the quarter, and increased $45.0 million, or two percent, for the six months. In constant currencies, combined operating margin dollars increased by $12.3 million, or one percent for the quarter and $120.7 million, or five percent for the six months. The U.S. and Europe segments accounted for over 80 percent of the combined margin dollars in both periods. As a percent of sales, Company-operated margins decreased for both periods. Food & paper costs as a percent of sales decreased for the quarter and increased for the six months, while payroll costs as a percent of sales increased for the quarter and decreased for the six months. Occupancy and other operating expenses increased as a percent of sales for both periods. In the U.S. and Europe, Company-operated margins decreased as a percent of sales for the quarter and six months. As a percent of sales in both segments, food & paper costs decreased, while payroll costs and occupancy & other operating expenses increased for both periods. In the U.S., approximately one-half of the second quarter's margin percent decline was due to the comparison to last year's Teenie Beanie Babies promotion. Germany, which also faced challenging comparisons due to strong promotions last year, accounted for half of Europe's margin percent decline for the quarter. As a percent of sales, Asia/Pacific's Company-operated margins decreased for the quarter and increased for the six months. Latin America's Company-operated margins decreased as a percent of sales for both periods, primarily due to difficult economic conditions experienced by most markets, partly offset by the consolidation of Argentina. Franchised margins as a percent of applicable revenues decreased for the quarter and six months. The decrease in the margin as a percent of revenues was primarily due to higher occupancy costs as a result of our strategy to lease more sites. By leasing a higher proportion of new sites, we have reduced initial capital requirements. However, as anticipated, this practice reduces franchised margins since the financing costs implicit in the lease are included in occupancy expense, whereas for owned sites, financing costs are reflected in interest expense. For all segments, excluding Other, franchised margins as a percent of revenues declined for the quarter and the six months primarily due to increased occupancy costs. In addition, the consolidation of Argentina and Indonesia contributed to the decline in margins as a percent of revenues in Latin America and Asia/Pacific, respectively, for both periods. Selling, General & Administrative Expenses Selling, general & administrative expenses increased eight percent for the quarter and nine percent for the six months. This increase was primarily due to spending to support the development of Other Brands and the consolidation of Argentina and Indonesia. Selling, general & administrative expenses included $14.3 million and $25.2 million related to Other Brands for the quarter and six months, respectively. Excluding Other Brands and the consolidations, selling, general & administrative expenses increased two percent for the quarter and four percent for the six months. Other Operating Income and Expense Other operating income and expense consists of transactions related to franchising and the food service business. Equity in earnings of unconsolidated affiliates decreased for the quarter primarily as a result of a gain reported in 1999 on the sale of real estate in a U.S. partnership. The decrease in other expense was primarily related to lower provisions for property dispositions in 2000 and costs in 1999 related to the write-off of software and the implementation of our Made For You food preparation system. Other operating income and expense Quarters ended Six months ended June 30 June 30 Dollars in millions 2000 1999 2000 1999 Gains on sales of restaurant businesses $22.3 $11.1 $37.9 $22.4 Equity in earnings of unconsolidated affiliates 33.5 52.2 59.9 73.9 Other (5.1) (55.8 ) (17.8) (75.6) Total $50.7 $ 7.5 $80.0 $20.7 Operating Income Consolidated operating income decreased $7.2 million, or one percent, for the quarter, while increasing two percent in constant currencies. For the six months, consolidated operating income increased $49.8 million, or three percent; six percent in constant currencies. The increases, in constant currencies, were due to higher combined operating margin dollars and higher other operating income, partly offset by higher selling, general & administrative expenses. Operating income by segment includes the allocation of corporate selling, general & administrative expenses. Operating income Increase/(Decrease) As In Constant Dollars in millions 2000 1999 Reported Currencies* Quarters ended June 30 U.S. $ 443.4 $ 428.4 4 % n/a Europe 281.5 303.5 (7) 3% Asia/Pacific 102.5 93.9 9 7 Latin America 23.3 25.7 (9) (8) Other** 25.6 32.0 (20) (19) Total operating income $ 876.3 $ 883.5 (1)% 2% Six months ended June 30 U.S. $ 787.6 $ 743.2 6 % n/a Europe 543.3 556.3 (2) 8% Asia/Pacific 215.9 185.2 17 13 Latin America 53.1 57.6 (8) (6) Other** 45.0 52.8 (15) (16) Total operating income $1,644.9 $1,595.1 3 % 6% * Excluding the effect of foreign currency translation on reported results ** Includes Other Brands operating losses of $8.8 million and $17.9 million for the quarter and six months of 2000, respectively. In 1999, Other Brands operating losses were $.6 million and $1.3 million for the quarter and six months, respectively. n/a Not applicable U.S. operating income increased $15.0 million or four percent for the quarter and $44.4 million or six percent for the six months. The increase for the quarter was driven by lower selling, general & administrative expenses and higher other operating income, while for the six months, the increase was due to higher combined operating margin dollars and higher other operating income. Europe's operating income increased three percent for the quarter and eight percent for the six months in constant currencies. Strong results in France, Italy, Russia and Spain drove this segment's performance in both periods. Weak results in Germany had a significant impact on the segment's operating income growth rate. Operating income in Asia/Pacific increased seven percent for the quarter and 13 percent for the six months in constant currencies. This segment benefited in both periods from strong performances in China and South Korea, while Australia's challenging comparisons and a drop in retail spending hurt results. In addition, the partial sale of our Japanese affiliate's ownership in Toys 'R' Us Japan, in connection with an initial public offering of Toys 'R' Us Japan, contributed to the increase. Japan's second quarter 1999 results benefited from a lower effective tax rate. Latin America's operating income decreased eight percent for the quarter and six percent for the six months in constant currencies. Both periods were negatively impacted by the difficult economic conditions experienced by most markets in the region. Increases in Brazil, Mexico and Venezuela, as well as the consolidation of Argentina, partly offset the decreases in both periods. In the Other segment, strong performances in Canada and several other markets were offset by the investment spending for Other Brands for the quarter and six months. INTEREST, NONOPERATING EXPENSE AND INCOME TAXES For both periods, higher interest expense was primarily due to significantly higher average debt levels, partly offset by lower average interest rates and weaker foreign currencies. The higher average debt levels were a result of the Company using its available credit capacity to fund share repurchases. Nonoperating (income) expense reflected a gain related to the sale of a partial ownership interest in a majority owned subsidiary outside the U.S. and lower minority interest expense for the quarter and six months. In addition, nonoperating (income) expense for the quarter reflected translation gains in 2000 compared with translation losses in 1999. The effective income tax rate was 32.0 percent for both periods of 2000 compared with 33.0 percent for both periods of 1999. WEIGHTED AVERAGE SHARES Weighted average shares outstanding for the second quarter and the six months were lower compared with the prior year due to shares repurchased. In addition, outstanding stock options had a less dilutive effect than in the prior year. During the first six months of 2000, the Company repurchased 35.7 million shares of its common stock for approximately $1.3 billion. FORWARD-LOOKING STATEMENTS Certain forward-looking statements are included in this report. They use such words as "may," "will," "expect," "believe," "plan" and other similar terminology. These statements reflect management's current expectations and involve a number of risks and uncertainties. Actual results could differ materially due to the effectiveness of operating initiatives and advertising and promotional efforts, the effects of the Euro conversion, as well as changes in: global and local business and economic conditions; currency exchange and interest rates; food, labor and other operating costs; political or economic instability in local markets; competition; consumer preferences, spending patterns and demographic trends; legislation and governmental regulation; and accounting policies and practices. MCDONALD'S CORPORATION CONDENSED CONSOLIDATED STATEMENT OF INCOME Dollars and shares in millions, except per common share data - -------------------------------------------------------------------- Inc/(Dec) Quarters ended June 30, 2000 1999 $ % - -------------------------------------------------------------------- SYSTEMWIDE SALES $10,237.6 $9,920.4 317.2 3 Revenues Sales by Company-operated restaurants 2,582.0 2,434.1 147.9 6 Revenues from franchised and affiliated restaurants 978.6 973.0 5.6 1 TOTAL REVENUES 3,560.6 3,407.1 153.5 5 Operating costs and expenses Company-operated restaurants 2,147.0 1,985.2 161.8 8 Franchised restaurants --occupancy costs 194.6 180.4 14.2 8 Selling, general & administrative expenses 393.4 365.5 27.9 8 Other operating (income) expense (50.7) (7.5) (43.2) n/m Total operating costs and expenses 2,684.3 2,523.6 160.7 6 OPERATING INCOME 876.3 883.5 (7.2) (1) Interest expense 106.2 97.5 8.7 9 Nonoperating (income) expense (2.9) 13.2 (16.1) n/m Income before provision for income taxes 773.0 772.8 0.2 - Provision for income taxes 247.1 254.7 (7.6) (3) NET INCOME $ 525.9 $ 518.1 7.8 2 NET INCOME PER COMMON SHARE $ 0.40 $ 0.38 0.02 5 NET INCOME PER COMMON SHARE-DILUTED $ 0.39 $ 0.37 0.02 5 Weighted average common shares outstanding 1,327.1 1,355.5 Weighted average common shares outstanding-diluted 1,365.5 1,405.6 n/m Not meaningful MCDONALD'S CORPORATION CONDENSED CONSOLIDATED STATEMENT OF INCOME Dollars and shares in millions, except per common share data - --------------------------------------------------------------------- Inc/(Dec) Six months ended June 30, 2000 1999 $ % - --------------------------------------------------------------------- SYSTEMWIDE SALES $19,744.3 $18,743.2 1,001.1 5 Revenues Sales by Company-operated restaurants 5,021.9 4,613.2 408.7 9 Revenues from franchised and affiliated restaurants 1,882.5 1,829.0 53.5 3 TOTAL REVENUES 6,904.4 6,442.2 462.2 7 Operating costs and expenses Company-operated restaurants 4,180.1 3,803.2 376.9 10 Franchised restaurants --occupancy costs 388.4 359.2 29.2 8 Selling, general & administrative expenses 771.0 705.4 65.6 9 Other operating (income) expense (80.0) (20.7) (59.3) n/m Total operating costs and expenses 5,259.5 4,847.1 412.4 9 OPERATING INCOME 1,644.9 1,595.1 49.8 3 Interest expense 206.6 202.7 3.9 2 Nonoperating (income) expense 2.6 18.9 (16.3) n/m Income before provision for income taxes 1,435.7 1,373.5 62.2 5 Provision for income taxes 458.9 452.7 6.2 1 NET INCOME $ 976.8 $ 920.8 56.0 6 NET INCOME PER COMMON SHARE $ 0.73 $ 0.68 0.05 7 NET INCOME PER COMMON SHARE-DILUTED $ 0.71 $ 0.65 0.06 9 Weighted average common shares outstanding 1,335.3 1,356.4 Weighted average common shares outstanding-diluted 1,374.2 1,407.1 n/m Not meaningful MCDONALD'S CORPORATION SYSTEMWIDE SALES Dollars in millions - ----------------------------------------------------------------------- % Inc/(Dec) Quarters ended June 30, 2000 1999 As Constant Reported Currency* - ----------------------------------------------------------------------- US Operated by franchisees $ 4,071.0 $4,044.8 1 Operated by the Company 798.3 807.0 (1) Operated by affiliates 323.2 318.1 2 5,192.5 5,169.9 - n/a Europe Operated by franchisees 1,278.1 1,289.2 (1) Operated by the Company 932.9 975.8 (4) Operated by affiliates 115.8 122.3 (5) 2,326.8 2,387.3 (3) 7 Asia/Pacific Operated by franchisees 442.0 426.1 4 Operated by the Company 424.4 393.7 8 Operated by affiliates 829.9 682.5 22 1,696.3 1,502.3 13 7 Latin America Operated by franchisees 224.5 197.6 14 Operated by the Company 179.7 121.0 49 Operated by affiliates 25.3 83.5 (70) 429.5 402.1 7 10 Other** Operated by franchisees 335.6 300.9 12 Operated by the Company 246.7 136.6 81 Operated by affiliates 10.2 21.3 (52) 592.5 458.8 29 30 Systemwide Operated by franchisees 6,351.2 6,258.6 1 Operated by the Company 2,582.0 2,434.1 6 Operated by affiliates 1,304.4 1,227.7 6 $10,237.6 $9,920.4 3 5 * Excluding the effect of foreign currency translation on reported results. ** The Other segment includes $111.8 million of sales in 2000 and $5.7 million in 1999 related to Other Brands. MCDONALD'S CORPORATION SYSTEMWIDE SALES Dollars in millions - ----------------------------------------------------------------------- % Inc/(Dec) Six months ended June 30, 2000 1999 As Constant Reported Currency* - ----------------------------------------------------------------------- US Operated by franchisees $ 7,597.0 $ 7,391.3 3 Operated by the Company 1,500.2 1,475.2 2 Operated by affiliates 600.3 586.6 2 9,697.5 9,453.1 3 n/a Europe Operated by franchisees 2,547.4 2,521.7 1 Operated by the Company 1,850.4 1,887.4 (2) Operated by affiliates 234.7 240.0 (2) 4,632.5 4,649.1 - 10 Asia/Pacific Operated by franchisees 907.3 850.7 7 Operated by the Company 895.6 763.6 17 Operated by affiliates 1,679.0 1,399.3 20 3,481.9 3,013.6 16 10 Latin America Operated by franchisees 449.1 388.9 15 Operated by the Company 358.5 240.4 49 Operated by affiliates 56.0 166.4 (66) 863.6 795.7 9 11 Other** Operated by franchisees 629.1 545.9 15 Operated by the Company 417.2 246.6 69 Operated by affiliates 22.5 39.2 (43) 1,068.8 831.7 29 28 Systemwide Operated by franchisees 12,129.9 11,698.5 4 Operated by the Company 5,021.9 4,613.2 9 Operated by affiliates 2,592.5 2,431.5 7 $19,744.3 $18,743.2 5 7 * Excluding the effect of foreign currency translation on reported results. ** The Other segment includes $159.2 million of sales in 2000 and $9.9 million in 1999 related to Other Brands. MCDONALD'S CORPORATION TOTAL REVENUES Dollars in millions - --------------------------------------------------------------------- % Inc/(Dec) As Constant Quarters ended June 30, 2000 1999 Reported Currency* - --------------------------------------------------------------------- U.S. $1,380.0 $1,379.8 - n/a Europe 1,190.0 1,237.1 (4) 5 Asia/Pacific 476.5 448.7 6 7 Latin America 225.8 165.8 36 40 Other** 288.3 175.7 64 66 $3,560.6 $3,407.1 5 8 - --------------------------------------------------------------------- % Inc/(Dec) As Constant Six months ended June 30, 2000 1999 Reported Currency* - --------------------------------------------------------------------- U.S. $2,589.6 $2,531.1 2 n/a Europe 2,361.0 2,393.3 (1) 7 Asia/Pacific 1,003.1 870.3 15 15 Latin America 454.7 329.4 38 41 Other** 496.0 318.1 56 55 $6,904.4 $6,442.2 7 10 * Excluding the effect of foreign currency translation on reported results. ** The Other segment revenue related to Other Brands for the second quarter and six months 2000 was $101.2 million and $138.5 million, respectively. MCDONALD'S CORPORATION OPERATING MARGINS OPERATING MARGINS - MCDONALD'S RESTAURANT BUSINESS** - -------------------------------------------------------------------------- % Inc/(Dec) Percent Amount As Constant Quarters ended June 30, 2000 1999 2000 1999 Reported Currency* - -------------------------------------------------------------------------- Company-operated U.S. 17.5% 19.4% $139.5 $156.2 (11) n/a Europe 18.6 19.4 173.9 189.6 (8) (1) Asia/Pacific 16.3 16.6 69.2 65.2 6 7 Latin America 12.9 13.1 23.1 15.8 46 49 Other 15.4 16.2 22.5 22.1 2 3 Total 17.3% 18.4% $428.2 $448.9 (5) (1) Franchised U.S. 81.4% 82.5% $473.4 $472.6 - n/a Europe 78.2 79.8 201.1 208.4 (4) 8 Asia/Pacific 82.1 83.5 42.8 45.9 (7) (2) Latin America 73.3 77.5 33.8 34.7 (3) - Other 78.9 79.3 32.5 31.0 5 6 Total 80.1% 81.5% $783.6 $792.6 (1) 2 - --------------------------------------------------------------------------- % Inc/(Dec) Percent Amount As Constant Six months ended June 30, 2000 1999 2000 1999 Reported Currency* - --------------------------------------------------------------------------- Company-operated U.S. 17.1% 18.1% $ 257.1 $ 267.0 (4) n/a Europe 18.1 18.5 335.0 348.5 (4) 4 Asia/Pacific 17.1 16.4 153.4 125.3 22 21 Latin America 12.7 13.6 45.6 32.7 39 43 Other 14.5 14.8 40.4 36.5 11 10 Total 17.0% 17.6% $ 831.5 $ 810.0 3 6 Franchised U.S. 80.3% 81.3% $ 875.1 $ 858.7 2 n/a Europe 77.8 78.5 397.1 397.1 - 12 Asia/Pacific 82.4 83.4 88.6 89.0 - 2 Latin America 74.5 77.9 71.7 69.3 3 5 Other 78.0 77.9 60.8 55.7 9 8 Total 79.4% 80.4% $1,493.3 $1,469.8 2 5 * Excluding the effect of foreign currency translation on reported results. ** Operating margin information relates to McDonald's restaurant business and excludes Other Brands. MCDONALD'S CORPORATION FINANCIAL INFORMATION COMPANY-OPERATED MARGINS AS A PERCENT OF SALES - MCDONALD'S RESTAURANT BUSINESS* - ------------------------------------------------------------------------- Quarters ended June 30 Six months ended June 30 2000 1999 2000 1999 - ------------------------------------------------------------------------- Food & paper 33.8 34.2 34.0 33.9 Payroll & employee benefits 25.4 24.9 25.4 25.5 Occupancy & other operating expenses 23.5 22.5 23.6 23.0 Total expenses 82.7 81.6 83.0 82.4 Company-operated margins 17.3 18.4 17.0 17.6 * Operating margin information relates to McDonald's restaurant business and excludes Other Brands. MCDONALD'S CORPORATION RESTAURANT INFORMATION SYSTEMWIDE RESTAURANTS - ------------------------------------------------------------------------- At June 30, 2000 1999 Inc/(Dec) - ------------------------------------------------------------------------- U.S.* 12,658 12,490 168 Europe Germany 1,044 947 97 England 901 820 81 France 812 744 68 Italy 257 211 46 Spain 238 194 44 Sweden 213 186 27 Netherlands 204 190 14 Poland 168 141 27 Other 1,295 1,125 170 Total Europe 5,132 4,558 574 Asia/Pacific Japan* 3,347 2,985 362 Australia 684 672 12 Taiwan 327 310 17 China 272 235 37 Philippines 228 201 27 South Korea 200 145 55 Hong Kong 169 158 11 Other 604 555 49 Total Asia/Pacific 5,831 5,261 570 Latin America Brazil* 998 771 227 Argentina 221 179 42 Mexico 183 150 33 Other 521 454 67 Total Latin America 1,923 1,554 369 Other Canada* 1,126 1,093 33 Other McDonald's 466 385 81 Other Brands 910 25 885 Total Other 2,502 1,503 999 Systemwide restaurants 28,046 25,366 2,680 Countries 119 115 4 * Includes satellites in 2000: U.S. 1,017; Japan 1,386; Brazil 503; Canada 268. In 1999: U.S. 1,055; Japan 1,189; Brazil 355; Canada 237. MCDONALD'S CORPORATION RESTAURANT INFORMATION RESTAURANT ADDITIONS - -------------------------------------------------------------------------- Quarters ended June 30 Six months ended June 30 2000 1999 2000 1999 - -------------------------------------------------------------------------- U.S. 34 28 29 18 Europe 121 88 189 137 Asia/Pacific 126 132 176 206 Latin America 73 121 134 149 Other - McDonald's 23 17 18 31 Other Brands 673* 5 694* 7 Systemwide additions 1,050 391 1,240 548 * Primarily relates to the acquisition of Boston Market in second quarter 2000. SYSTEMWIDE RESTAURANTS - ----------------------------------------------------------------------- At June 30, 2000 1999 Inc/(Dec) - ----------------------------------------------------------------------- US Operated by franchisees 10,028 9,889 139 Operated by the Company 1,813 1,803 10 Operated by affiliates 817 798 19 12,658 12,490 168 Europe Operated by franchisees 2,871 2,486 385 Operated by the Company 2,040 1,866 174 Operated by affiliates 221 206 15 5,132 4,558 574 Asia/Pacific Operated by franchisees 1,563 1,403 160 Operated by the Company 1,343 1,180 163 Operated by affiliates 2,925 2,678 247 5,831 5,261 570 Latin America Operated by franchisees 1,023 818 205 Operated by the Company 792 456 336 Operated by affiliates 108 280 (172) 1,923 1,554 369 Other Operated by franchisees 1,123 969 154 Operated by the Company 1,293 420 873 Operated by affiliates 86 114 (28) 2,502 1,503 999 Systemwide Operated by franchisees 16,608 15,565 1,043 Operated by the Company 7,281 5,725 1,556 Operated by affiliates 4,157 4,076 81 28,046 25,366 2,680 -----END PRIVACY-ENHANCED MESSAGE-----