-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, sUF2DYqpU/iOrdTy4eXG8vy1vQNXvDvsbeJPmaCYX9bs/vtSp3eK1fHwJZC0QLS+ 3+Sj6RyjUAbxCQif/veh2w== 0000063908-95-000014.txt : 19950517 0000063908-95-000014.hdr.sgml : 19950516 ACCESSION NUMBER: 0000063908-95-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: CSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCDONALDS CORP CENTRAL INDEX KEY: 0000063908 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 362361282 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05231 FILM NUMBER: 95537278 BUSINESS ADDRESS: STREET 1: ONE MCDONALD'S PLZ CITY: OAK BROOK STATE: IL ZIP: 60521 BUSINESS PHONE: 7085753000 10-Q 1 1ST QTR 1995 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-5231 ---------- ---------- ------ McDONALD'S CORPORATION ----------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 36-2361282 ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) McDonald's Plaza, Oak Brook, Illinois 60521 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) (708) 575-3000 -------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- 694,787,230 --------------------------------- (Number of shares of common stock outstanding as of March 31, 1995) 2 McDONALD'S CORPORATION ---------------------- INDEX ----- Page Reference Part I. Financial Information Item 1 - Financial Statements Condensed consolidated balance sheet, March 31, 1995 (unaudited) and December 31, 1994 3 Condensed consolidated statement of income (unaudited), first quarters ended March 31, 1995 and 1994 4 Condensed consolidated statement of cash flows (unaudited), first quarters ended March 31, 1995 and 1994 5 Financial comments (unaudited) 6 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II. Other Information Item 6 - Exhibits and Reports on Form 8-K (a)Exhibits The exhibits listed in the accompanying Exhibit Index are filed as part of this report 14 (b)Reports on Form 8-K 17 Signature 18 3 PART I. FINANCIAL INFORMATION ------------------------------ Item 1. Financial Statements ----------------------------- CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited) (In millions of dollars) March 31, 1995 December 31, 1994 --------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash and equivalents $ 198.2 $ 179.9 Accounts receivable 320.7 348.1 Notes receivable 30.7 31.2 Inventories, at cost, not in excess of market 52.3 50.5 Prepaid expenses and other current assets 138.3 131.0 --------------------------------------------------------------------------- TOTAL CURRENT ASSETS 740.2 740.7 --------------------------------------------------------------------------- OTHER ASSETS AND DEFERRED CHARGES 1,108.1 1,039.7 --------------------------------------------------------------------------- PROPERTY AND EQUIPMENT Property and equipment, at cost 15,895.0 15,184.6 Accumulated depreciation and amortization (4,048.2) (3,856.2) --------------------------------------------------------------------------- NET PROPERTY AND EQUIPMENT 11,846.8 11,328.4 --------------------------------------------------------------------------- INTANGIBLE ASSETS-NET 518.4 483.1 --------------------------------------------------------------------------- TOTAL ASSETS $14,213.5 $13,591.9 =========================================================================== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 433.6 $ 1,046.9 Accounts payable 387.5 509.4 Income taxes 94.2 25.0 Accrued interest 123.9 107.7 Other accrued liabilities 453.1 394.0 Current maturities of long-term debt 66.2 368.3 --------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 1,558.5 2,451.3 --------------------------------------------------------------------------- LONG-TERM DEBT 3,986.4 2,935.4 OTHER LONG-TERM LIABILITIES AND MINORITY INTERESTS 650.6 422.8 DEFERRED INCOME TAXES 771.4 840.8 COMMON EQUITY PUT OPTIONS 56.2 SHAREHOLDERS' EQUITY Preferred stock, no par value; authorized - 165.0 million shares; issued - 11.2 million 673.2 674.2 Common stock, no par value; authorized - 1.25 billion shares; issued - 830.3 million 92.3 92.3 Additional paid-in capital 300.1 286.0 Guarantee of ESOP notes (234.2) (234.4) Retained earnings 8,853.0 8,625.9 Foreign currency translation adjustment (50.4) (114.9) --------------------------------------------------------------------------- 9,634.0 9,329.1 --------------------------------------------------------------------------- Common stock in treasury, at cost; 135.5 and 136.6 million shares (2,387.4) (2,443.7) --------------------------------------------------------------------------- TOTAL SHAREHOLDERS' EQUITY 7,246.6 6,885.4 --------------------------------------------------------------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $14,213.5 $13,591.9 =========================================================================== See accompanying Financial comments. /TABLE 4 CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(In millions of dollars, except Quarters Ended per common share data) March 31 1995 1994 ------------------------------------------------------------------------------ REVENUES Sales by Company-operated restaurants $1,511.6 $1,244.7 Revenues from franchised restaurants 649.7 551.3 ------------------------------------------------------------------------------ TOTAL REVENUES 2,161.3 1,796.0 ------------------------------------------------------------------------------ OPERATING COSTS AND EXPENSES Company-operated restaurants 1,233.2 1,017.4 Franchised restaurants- occupancy costs 118.2 100.4 General, administrative and selling expenses 275.4 239.5 Other operating (income) expense-net (12.2) (20.4) ------------------------------------------------------------------------------ TOTAL OPERATING COSTS AND EXPENSES 1,614.6 1,336.9 ------------------------------------------------------------------------------ OPERATING INCOME 546.7 459.1 ------------------------------------------------------------------------------ Interest expense 81.0 71.8 Nonoperating income (expense)-net (30.6) (9.9) ------------------------------------------------------------------------------ INCOME BEFORE PROVISION FOR INCOME TAXES 435.1 377.4 ------------------------------------------------------------------------------ Provision for income taxes 154.4 134.0 ------------------------------------------------------------------------------ NET INCOME $ 280.7 $ 243.4 ============================================================================== NET INCOME PER COMMON SHARE $ .39 $ .33 ------------------------------------------------------------------------------ DIVIDENDS PER COMMON SHARE $ .06 $ .0538 ------------------------------------------------------------------------------ See accompanying Financial comments. /TABLE 5 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Quarters ended March 31 (In millions of dollars) 1995 1994 ------------------------------------------------------------------------------- OPERATING ACTIVITIES Net income $280.7 $243.4 Adjustments to reconcile to cash provided by operations Depreciation and amortization 168.8 147.9 Changes in operating working capital items (72.3) (13.3) Other 28.6 (1.2) ------------------------------------------------------------------------------- CASH PROVIDED BY OPERATIONS 405.8 376.8 ------------------------------------------------------------------------------- INVESTING ACTIVITIES Property and equipment expenditures (347.7) (260.2) Purchases and sales of restaurant businesses and sales of other property 8.1 8.0 Other (8.1) (4.7) ------------------------------------------------------------------------------- CASH USED FOR INVESTING ACTIVITIES (347.7) (256.9) ------------------------------------------------------------------------------- FINANCING ACTIVITIES Notes payable and long-term financing issuances and repayments 10.1 (73.4) Treasury stock purchases (6.9) (27.9) Common and preferred stock dividends (54.6) (50.8) Other 11.6 14.5 ------------------------------------------------------------------------------- CASH USED FOR FINANCING ACTIVITIES (39.8) (137.6) ------------------------------------------------------------------------------- CASH AND EQUIVALENTS INCREASE (DECREASE) 18.3 (17.7) ------------------------------------------------------------------------------- Cash and equivalents at beginning of period 179.9 185.8 ------------------------------------------------------------------------------- CASH AND EQUIVALENTS AT END OF PERIOD $198.2 $168.1 =============================================================================== See accompanying Financial comments. /TABLE 6 FINANCIAL COMMENTS (UNAUDITED) BASIS OF PRESENTATION The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company's 1994 Annual Report to Shareholders. In the opinion of the Company, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation have been included. The results of operations of restaurant businesses purchased and sold were not material to the condensed consolidated financial statements for periods prior to purchase and sale. NET INCOME PER COMMON SHARE Net income per common share was computed using net income, reduced by preferred stock cash dividends (net of tax) of $11.9 and $11.8 million for the first quarters of 1995 and 1994, respectively. Adjusted net income was divided by the weighted average shares of common stock outstanding: 694.3 and 707.5 million for the first quarters ended March 31, 1995 and 1994, respectively. The effect of potentially dilutive securities was not material. COMMON EQUITY PUT OPTIONS During November and December 1994, the Company sold 2.0 million common equity put options which expired unexercised in the first quarter of 1995. At December 31, 1994, the $56.2 million exercise price of these options was classified in common equity put options, and the related offset was recorded in common stock in treasury, net of premiums received. LINE OF CREDIT AGREEMENT Effective April 19, 1995, the Company cancelled its existing $700.0 million line of credit agreement, which remained unused at March 31, 1995, and entered into a new $675.0 million five-year revolving credit agreement with various banks. Accordingly, $675.0 million of notes maturing within one year have been reclassified as long-term debt. The new five-year agreement provides for fees of .07% per annum on the total commitment and expires April 19, 2000. 7 Item 2. Management's Discussion And Analysis Of Financial Condition -------------------------------------------------------------------- And Results Of Operations ------------------------- INCREASES (DECREASES) IN OPERATING RESULTS OVER 1994
(Dollars in millions, except First Quarter per common share data) Ended March 31 ------------------------------------------------------------------------- SYSTEMWIDE SALES $962.4 17% ------------------------------------------------------------------------- REVENUES Sales by Company-operated restaurants $266.9 21% Revenues from franchised restaurants 98.4 18 ------------------------------------------------------------------------- TOTAL REVENUES 365.3 20 ------------------------------------------------------------------------- OPERATING COSTS AND EXPENSES Company-operated restaurants 215.8 21 Franchised restaurants- occupancy costs 17.8 18 General, administrative and selling expenses 35.9 15 Other operating (income) expense-net 8.2 (40) ------------------------------------------------------------------------- TOTAL OPERATING COSTS AND EXPENSES 277.7 21 ------------------------------------------------------------------------- OPERATING INCOME 87.6 19 ------------------------------------------------------------------------- Interest expense 9.2 13 Nonoperating income (expense)-net (20.7) NM ------------------------------------------------------------------------- INCOME BEFORE PROVISION FOR INCOME TAXES 57.7 15 ------------------------------------------------------------------------- Provision for income taxes 20.4 15 ------------------------------------------------------------------------- NET INCOME $37.3 15% ========================================================================= NET INCOME PER COMMON SHARE $ .06 18% ------------------------------------------------------------------------- NM - Not Meaningful /TABLE 8 CONSOLIDATED OPERATING RESULTS Net income and net income per common share increased 15 and 18%, respectively. The three percentage point spread between the increases in net income and net income per common share reflected the impact of share repurchase. The Company has repurchased about $500 million of its common stock in connection with a three-year, $1 billion program announced in January 1994. Systemwide sales represent sales by Company-operated, franchised and affiliated restaurants and satellites. The increase was due to expansion and higher sales at existing locations worldwide, aided by stronger foreign currencies. ----------------------------------------------------------------------- LOCATIONS Quarters ended March 31 1995 1994 ----------------------------------------------------------------------- RESTAURANT ADDITIONS U.S. 51 40 Outside of the U.S. 114 85 ----------------------------------------------------------------------- Total restaurant additions 165 125 ----------------------------------------------------------------------- Total satellite additions 138 71 ----------------------------------------------------------------------- UNDER CONSTRUCTION U.S. 99 107 Outside of the U.S. 228 128 ----------------------------------------------------------------------- Total restaurants 327 235 ----------------------------------------------------------------------- Total revenues consist of sales by Company-operated restaurants and satellites, and fees from restaurants and satellites operated by franchisees and affiliates. These fees are based upon a percent of sales with specified minimum payments. The revenue increase reflected strong worldwide operating results. ----------------------------------------------------------------------- CONSOLIDATED MARGINS Quarters ended March 31 1995 1994 ----------------------------------------------------------------------- As a percent of sales/revenues Franchised 81.8 81.8 Company-operated 18.4 18.3 ----------------------------------------------------------------------- In millions of dollars Franchised $531.5 $450.9 Company-operated 278.4 227.3 ----------------------------------------------------------------------- Franchised margin dollars comprised about two-thirds of the combined operating margins, the same as in the prior year. Company- operated margins as a percent of sales improved slightly; as a percent of sales, food and paper and payroll costs increased, while occupancy and other operating costs declined. 9 The increase in general, administrative and selling expenses was primarily due to strategic global spending to support the convenience and value strategies and stronger foreign currencies. Other operating transactions relate to franchising and the foodservice business, the details of which are shown below. The other category in 1995 included higher provisions for property dispositions. ------------------------------------------------------------------------ OTHER OPERATING TRANSACTIONS Quarters ended March 31 In millions of dollars 1995 1994 ------------------------------------------------------------------------ Gains on sales of restaurant businesses $(11.9) $(17.4) Equity in earnings of unconsolidated affiliates (19.2) (10.9) Other 18.9 7.9 ------------------------------------------------------------------------ Other operating (income) expense-net $(12.2) $(20.4) ======================================================================== The increase in consolidated operating income primarily reflected higher combined operating margins and stronger foreign currencies, partially offset by higher general, administrative and selling expenses. Interest expense increased due to higher debt levels and stronger foreign currencies, partially offset by lower average interest rates. Nonoperating income (expense) was impacted by higher losses on investments and higher minority interest charges. The effective income tax rate was 35.5% in the first quarters of 1995 and 1994, compared to 35.1% for the year 1994. U.S. OPERATING RESULTS U.S. sales grew due to expansion and higher sales at existing restaurants. Positive comparable sales were achieved in both periods of 1995 and 1994 through an emphasis on value and customer satisfaction in the form of Extra Value Meals, Happy Meals and the three-tier program. Additionally in this quarter, programs such as 95 cents Big Mac/Egg McMuffin in January, 95 cents Double Cheeseburger/Sausage McMuffin with Egg in February, as well as 99 cents Bacon Double Cheeseburger/Bacon, Egg & Cheese Biscuit and Bacon Cheddar LT as Taste of the Month in March, generated incremental transactions. ----------------------------------------------------------------------- U.S. OPERATING RESULTS Quarters ended March 31 1995 1994 ----------------------------------------------------------------------- Percent increase Sales 8 6 Revenues 9 6 Operating income 4 5 ----------------------------------------------------------------------- As a percent of sales/revenues Company-operated margins 16.3 17.7 Franchised margins 82.4 82.2 ----------------------------------------------------------------------- 10 The increase in U.S. operating income was driven by higher franchised margin dollars, partially offset by higher general, administrative and selling expenses. Company-operated margin dollars were relatively flat; the decline as a percent of sales resulted from higher food and payroll costs associated with the programs described above. The improvements in franchised margin dollars and as a percent of revenues were due to sales growth. OPERATING RESULTS OUTSIDE OF THE U.S. Sales outside of the U.S. rose due to expansion, stronger foreign currencies and higher sales at existing restaurants. Comparable sales on a local currency basis were positive in both periods of 1995 and 1994. ----------------------------------------------------------------------- OPERATING RESULTS Quarters ended March 31 OUTSIDE OF THE U.S. 1995 1994 ----------------------------------------------------------------------- Percent increase Sales 30 14 Revenues 33 12 Operating income 38 19 ----------------------------------------------------------------------- As a percent of sales/revenues Company-operated margins 19.9 18.8 Franchised margins 81.0 81.0 ----------------------------------------------------------------------- All geographic segments reported excellent gains in operating results. Noteworthy achievements were evident in Canada; Australia, Singapore, Taiwan and Japan in Asia/Pacific; France, Germany, England, the Netherlands and Switzerland in Europe/Africa/Middle East; and Brazil in Latin America. Transactions, sales and profits have improved notably in Japan in this quarter. Results in Mexico continued to be impacted by the economy and currency devaluation; however, we believe this market offers long-term potential for McDonald's. The increase in operating income outside of the U.S. resulted from expansion, higher combined operating margins and stronger foreign currencies, partially offset by higher general, administrative and selling expenses. The improvement in Company-operated margins as a percent of sales reflected better operating performance, principally in Brazil. The improvement in franchised margin dollars reflected better sales and stronger foreign currencies. 11 IMPACT OF FOREIGN CURRENCIES ON REPORTED RESULTS The Deutsche Mark, French Franc, British Pound Sterling, Australian Dollar and Japanese Yen represented the foreign currencies which significantly contributed to the impact on reported results for the first quarter of 1995. If exchange rates had remained at 1994 levels, reported results would have been as follows: --------------------------------------------------------------- FOREIGN CURRENCY IMPACT Quarter ended March 31, 1995 Dollars in millions Reported Adjusted --------------------------------------------------------------- Systemwide sales $6,671.6 17% $6,431.4 13% Operating income 546.7 19 522.1 14 Net income 280.7 15 271.0 11 --------------------------------------------------------------- While changing foreign currencies impact reported results, McDonald's lessens short-term cash exposures by primarily purchasing goods and services in local currencies, financing in local currencies and selectively hedging foreign-denominated cash flows. FINANCIAL POSITION Cash provided by operations for the first quarter increased 8% and was affected by a significant reduction of current liabilities. Together with other sources of cash such as borrowings, cash provided by operations was used primarily for capital expenditures and dividends. In connection with accelerated expansion, U.S. capital expenditures increased 27% and capital expenditures outside of the U.S. increased 39% in the first quarter. 12 FIRST QUARTER HIGHLIGHTS
OPERATING RESULTS ------------------------------------------------------------------------- Dollars in millions, except Quarters Ended per common share data March 31 1995 1994 ------------------------------------------------------------------------- Systemwide sales $6,671.6 $5,709.2 ------------------------------------------------------------------------- U.S. sales $3,604.6 $3,346.4 Operated by franchisees 2,836.0 2,684.9 Operated by the Company 622.3 575.3 Operated by affiliates 146.3 86.2 ------------------------------------------------------------------------- Sales outside of the U.S. $3,067.0 $2,362.8 Operated by franchisees 1,450.0 1,108.1 Operated by the Company 889.3 669.4 Operated by affiliates 727.7 585.3 ------------------------------------------------------------------------- Total revenues $2,161.3 1,796.0 U.S. 1,013.9 933.0 Outside of the U.S. 1,147.4 863.0 ------------------------------------------------------------------------- Operating income* $ 546.7 $ 459.1 U.S. 269.4 260.0 Outside of the U.S. 288.1 209.4 Corporate (10.8) (10.3) ------------------------------------------------------------------------- Income before provision for income taxes $ 435.1 $ 377.4 Net income 280.7 243.4 Net income per common share .39 .33 ------------------------------------------------------------------------- Cash provided by operations $ 405.8 $ 376.8 ------------------------------------------------------------------------- * 1994 operating income has been restated to reflect a more meaningful allocation of general, administrative and selling expenses between the U.S. and international segments and now includes an additional corporate category which is not allocated. /TABLE 13 RESTAURANTS
------------------------------------------------------------------------- At March 31, 1995 1994 ------------------------------------------------------------------------- Systemwide restaurants 15,370 14,118 ------------------------------------------------------------------------- U.S. restaurants 9,795 9,323 Operated by franchisees 7,813 7,628 Operated by the Company 1,563 1,458 Operated by affiliates 419 237 ------------------------------------------------------------------------- Restaurants outside of the U.S. 5,575 4,795 Operated by franchisees 2,664 2,258 Operated by the Company 1,580 1,283 Operated by affiliates 1,331 1,254 ------------------------------------------------------------------------- /TABLE 14 PART II Item 6. Exhibits and Reports on Form 8-K ----------------------------------------- (a) - Exhibits -------------- Exhibit Number Description -------------- ----------- (3) Restated Certificate of Incorporation and By-Laws, dated as of November 15, 1994, incorporated herein by reference from Exhibit 3 of Form 10-K for the year ended December 31, 1994. (4) Instruments defining the rights of security holders, including indentures (A): (a) Debt Securities. Indenture dated as of March 1, 1987 incorporated herein by reference from Exhibit 4(a) of Form S-3 Registration Statement, SEC file no. 33-12364. (i) Supplemental Indenture No. 5 incorporated herein by reference from Exhibit (4) of Form 8-K dated January 23, 1989. (ii) 9-3/4% Notes due 1999. Supplemental Indenture No. 6 incorporated herein by reference from Exhibit (4) of Form 8-K dated January 23, 1989. (iii) Medium-Term Notes, Series B, due from nine months to 30 years from Date of Issue. Supplemental Indenture No. 12 incorporated herein by reference from Exhibit (4) of Form 8-K dated August 18, 1989 and Forms of Medium-Term Notes, Series B, incorporated herein by reference from Exhibit (4)(b) of Form 8-K dated September 14, 1989. (iv) Medium-Term Notes, Series C, due from nine months to 30 years from Date of Issue. Form of Supplemental Indenture No. 15 incorporated herein by reference from Exhibit 4(b) of Form S-3 Registration Statement, SEC file no. 33-34762 dated May 14, 1990. (v) Medium-Term Notes, Series C, due from nine months (U.S. issue)/184 days (Euro issue) to 30 years from Date of Issue. Amended and restated Supplemental Indenture No. 16 incorporated herein by reference from Exhibit (4) of Form 10-Q for the period ended March 31, 1991. 15 Exhibit Number Description -------------- ----------- (vi) 8-7/8% Debentures due 2011. Supplemental Indenture No. 17 incorporated herein by reference from Exhibit (4) of Form 8-K dated April 22, 1991. (vii) Medium-Term Notes, Series D, due from nine months (U.S. issue)/184 days (Euro issue) to 60 years from Date of Issue. Supplemental Indenture No. 18 incorporated herein by reference from Exhibit 4(b) of Form S-3 Registration Statement, SEC file no. 33-42642 dated September 10, 1991. (viii)7-3/8% Notes due July 15, 2002. Form of Supplemental Indenture No. 19 incorporated herein by reference from Exhibit (4) of Form 8-K dated July 10, 1992. (ix) 6-3/4% Notes due February 15, 2003. Form of Supplemental Indenture No. 20 incorporated herein by reference from Exhibit (4) of Form 8-K dated March 1, 1993. (x) 7-3/8% Debentures due July 15, 2033. Form of Supplemental Indenture No. 21 incorporated herein by reference from Exhibit (4)(a) of Form 8-K dated July 15, 1993. (b) Form of Deposit Agreement dated as of November 25, 1992 by and between McDonald's Corporation, First Chicago Trust Company of New York, as Depositary, and the Holders from time to time of the Depositary Receipts. (c) Rights Agreement dated as of December 13, 1988 between McDonald's Corporation and The First National Bank of Chicago, incorporated herein by reference from Exhibit 1 of Form 8-K dated December 23, 1988. (i) Amendment No. 1 to Rights Agreement incorporated herein by reference from Exhibit 1 of Form 8-K dated May 25, 1989. (ii) Amendment No. 2 to Rights Agreement incorporated herein by reference from Exhibit 1 of Form 8-K dated July 25, 1990. (d) Indenture and Supplemental Indenture No. 1 dated as of September 8, 1989, between McDonald's Matching and Deferred Stock Ownership Trust, McDonald's Corporation and Pittsburgh National Bank in connection with SEC Registration Statement Nos. 33-28684 and 33-28684-01, incorporated herein by reference from Exhibit (4)(a) of Form 8-K dated September 14, 1989. 16 Exhibit Number Description -------------- ----------- (e) Form of Supplemental Indenture No. 2 dated as of April 1, 1991, supplemental to the Indenture between McDonald's Matching and Deferred Stock Ownership Trust, McDonald's Corporation and Pittsburgh National Bank in connection with SEC Registration Statement Nos. 33-28684 and 33-28684-01, incorporated herein by reference from Exhibit (4)(c) of Form 8-K dated March 22, 1991. (10) Material Contracts (a) Directors' Stock Plan, as amended and restated, incorporated herein by reference from Form 10-K for the year ended December 31, 1994.* (b) Profit Sharing Program, as amended and restated, incorporated herein by reference from Form 10-K for the year ended December 31, 1994.* (c) McDonald's Supplemental Employee Benefit Equalization Plan, McDonald's Profit Sharing Program Equalization Plan and McDonald's 1989 Equalization Plan, incorporated by reference from Form 10-K/A dated May 4, 1993, Amendment No. 1 to Form 10-K for the year ended December 31, 1992*. (i) Amendment No. 1 to McDonald's 1989 Equalization Plan, incorporated herein by reference from Form 10-Q for the period ended June 30, 1993. (ii) Amendment No. 2 to McDonald's 1989 Equalization Plan, incorporated herein by reference from Form 10-K for the year ended December 31, 1993. (iii)Amendment No. 1 to McDonald's Supplemental Employee Benefit Equalization Plan, incorporated herein by reference from Form 10-K for the year ended December 31, 1993. (iv) Amendment No. 2 to McDonald's Supplemental Employee Equalization Plan, incorporated herein by reference from Form 10-K for the year ended December 31, 1993. (d) 1975 Stock Ownership Option Plan, incorporated herein by reference from Exhibit (10)(d) of Form 10-K for the year ended December 31, 1992*. (e) Stock Sharing Plan, as amended and restated, incorporated herein by reference from Form 10-K for the year ended December 31, 1994.* 17 Exhibit Number Description -------------- ----------- (f) 1992 Stock Ownership Incentive Plan, incorporated herein by reference from exhibit pages 20-34 of McDonald's 1992 Proxy Statement and Notice of 1992 Annual Meeting of Shareholders dated April 10, 1992*. (g) McDonald's Corporation Deferred Incentive Plan, as amended and restated, incorporated herein by reference from Form 10-K for the year ended December 31, 1994.* (11) Statement re: Computation of per share earnings. (12) Statement re: Computation of ratios. (27) Financial Data Schedule -------------------- * Denotes compensatory plan. (A) Other instruments defining the rights of holders of long-term debt of the registrant and all of its subsidiaries for which consolidated financial statements are required to be filed and which are not required to be registered with the Securities and Exchange Commission, are not included herein as the securities authorized under these instruments, individually, do not exceed 10% of the total assets of the registrant and its subsidiaries on a consolidated basis. An agreement to furnish a copy of any such instruments to the Securities and Exchange Commission upon request has been filed with the Commission. (b) Reports on Form 8-K There were no reports on Form 8-K filed for the first quarter covered by this report, and subsequently up to May 12, 1995. 18 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 thereunto duly authorized. McDONALD'S CORPORATION (Registrant) By /s/ Jack M. Greenberg ----------------- (Signature) Jack M. Greenberg Vice Chairman, Chief Financial Officer May 12, 1995 ---------------- (Date) EX-11 2 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS 19 Exhibit 11 McDONALD'S CORPORATION STATEMENT RE COMPUTATION OF PER SHARE EARNINGS (Dollars and shares in millions, except per common share data)
Quarters Ended March 31, 1995 1994 ---- ---- Net Income (A) $280.7 $243.4 Preferred stock dividends (net of tax) (11.9) (11.8) ------- ------- Net income available after preferred stock dividends 268.8 231.6 Common stock dividends on assumed conversion of preferred stock 0.4 0.3 ------- ------- Net income available to common shareholders $269.2 $231.9 ======= ======= Weighted average number of common shares outstanding during the period (A) 694.3 707.5 Additional shares related to potentially dilutive securities 22.8 21.9 ------- ------- Adjusted weighted average common shares 717.1 729.4 ======= ======= Fully diluted net income per common share $ 0.38 $ 0.32 ------- ------- --------------------- NOTES: (A) Refer to Condensed consolidated statement of income on page 4 and to Financial comments - Net income per common share on page 6 of this report. /TABLE EX-12 3 STATEMENT RE COMPUTATION OF RATIOS 20 Exhibit 12 McDONALD'S CORPORATION STATEMENT RE: COMPUTATION OF RATIOS (Dollars in Millions)
Quarters Ended March 31, Years Ended December 31, 1995 1994 1994 1993 1992 1991 1990 ---- ---- ---- ---- ---- ---- ---- EARNINGS AVAILABLE FOR FIXED CHARGES - Income before provision for income taxes $435.1 $377.4 $1,886.6 $1,675.7 $1,448.1 $1,299.4 $1,246.3 - Minority interest in operating results of majority-owned subsidiaries, less equity in undistributed operating results of less-than-50% owned affiliates 3.9 (0.1) 6.6 6.9 5.3 5.1 0.6 - Provision for income taxes of 50% owned affiliates included in consolidated income before provision for income taxes 18.6 8.7 34.9 34.2 29.4 34.1 28.8 - Portion of rent charges (after reduction for rental income from subleased properties) considered to be representative of interest factors* 24.5 18.1 83.4 71.6 70.1 67.9 59.0 - Interest expense, amortization of debt discount and issuance costs, and depreciation of capitalized interest* 91.8 82.4 346.0 358.0 413.8 433.9 411.9 --------------------------------------------------------------------------- $573.9 $486.5 $2,357.5 $2,146.4 $1,966.7 $1,840.4 $1,746.6 =========================================================================== FIXED CHARGES - Portion of rent charges (after reduction for rental income from subleased properties) considered to be representative of interest factors* $24.5 $18.1 $83.4 $71.6 $70.1 $67.9 $59.0 - Interest expense, amortization of debt discount and issuance costs, and fixed charges related to redeemable preferred stock* 94.3 81.5 343.9 349.3 405.4 425.7 403.4 - Capitalized interest* 4.5 3.9 21.0 20.7 20.5 28.5 38.9 --------------------------------------------------------------------------- $123.3 $103.5 $448.3 $441.6 $496.0 $522.1 $501.3 =========================================================================== RATIO OF EARNINGS TO FIXED CHARGES 4.66 4.70 5.26 4.86 3.96 3.53 3.48 =========================================================================== *Includes amounts of the Registrant and its majority-owned subsidiaries, and one-half of the amounts of 50%-owned affiliates. /TABLE EX-27 4 FINANCIAL DATA SCHEDULE
5 1,000,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 198 0 351 0 52 740 15,895 4,048 14,214 1,559 3,986 92 0 673 6,481 14,214 1,512 2,161 1,233 1,351 263 0 81 435 154 281 0 0 0 281 .39 0
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