EXHIBIT 99
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Investor Release
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FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
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10/19/00 Investors: Xxxx Xxxxx, 000-000-0000
Media: Xxxx Xxxxxxxx, 000-000-0000
FOR ACCESS TO CONFERENCE CALL:
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When: 12:00 noon CDT Thursday, 10/19/00
Where: xxxx://xxx.xxxxxxxxx.xxx
McDONALD'S REPORTS GLOBAL RESULTS
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OAK BROOK, IL -- XxXxxxxx'x Corporation today announced global results for the
quarter and nine months ended September 30, 2000.
. Diluted net income per common share was 41 cents for the quarter, an increase
of 5%; 10% in constant currencies. For the nine months, diluted net income
per common share increased 8%; 12% in constant currencies.
. Systemwide sales increased 8% for the quarter and 7% for the nine months in
constant currencies.
. Revenues increased 13% for the quarter and 12% for the nine months in
constant currencies.
. For the quarter, Europe's operating income increased 10% and sales increased
13% in constant currencies. For the quarter, U.S. operating income increased
9% and sales increased 4%.
. The Company repurchased approximately $1.7 billion of stock during the nine
months.
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Key highlights - Consolidated 2000 1999 Increase/(Decrease)
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Dollars in millions, except per common As In Constant
share data Reported Currencies*
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Quarters ended September 30
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Systemwide sales $10,512.4 $ 9,997.8 5% 8%
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Total revenues 3,749.0 3,444.2 9 13
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Operating income 910.8 907.7 - 5
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Net income 548.5 540.9 1 6
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Net income per common share - diluted .41 .39 5 10
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Nine months ended September 30
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Systemwide sales $30,256.7 $28,741.0 5% 7%
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Total revenues 10,653.4 9,886.4 8 12
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Operating income 2,555.7 2,502.8 2 6
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Net income 1,525.3 1,461.7 4 8
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Net income per common share - diluted 1.12 1.04 8 12
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* 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 Xxxx X. Xxxxxxxxx said, "McDonald's posted
positive worldwide comparable sales in constant currencies for the nine months
and quarter ending September 30, 2000. Also, during the past 12 months we added
1,773 McDonald's restaurants and 727 restaurants operated by our other brands.
This growth resulted in a Systemwide sales increase of 7 percent for the nine
months and 8 percent for the quarter in constant currencies, further
demonstrating that Brand McDonald's continues to be in demand by the 43 million
customers we serve each day around the world. Recently, we welcomed American
Samoa as the 120th country to raise the Golden Arches.
"Earnings per share grew 10 percent for the quarter and 12 percent for the
nine months in constant currencies.
"Moving forward, we will pursue additional growth by intensifying our focus
on building sales at existing restaurants. We'll do this by developing our
people and delivering fresh, great-tasting food and outstanding Quality,
Service, Cleanliness and Value. In addition, we'll extend Brand McDonald's and
leverage our strengths to develop our other brands, which are reporting good
results at the restaurant level. And we plan to continue to add about five
XxXxxxxx'x restaurants each day as these new restaurants are posting strong
initial results and returns.
"Finally, we believe share repurchase is the best use of our free cash flow
and credit capacity. Taking advantage of our low stock price, we bought about
$426 million of common stock in the third quarter. This brought year-to-date
purchases to nearly $1.7 billion and the cumulative purchases under our $4.5
billion, three-year share repurchase program to $2.9 billion, or 82.4 million
shares."
Xxx Xxxxxxxxx, Vice Chairman and President XxXxxxxx'x Corporation said,
"Europe posted strong sales for the quarter. And, while the Euro continues to
greatly reduce our reported results, the actual economic impact on our business
is much less than for many other global businesses. This is because we source
most of our food and paper locally, reinvest our profits back into the local
markets, and finance our long-term growth in local currencies. Weak consumer
spending in many Asia/Pacific and Latin America markets continues to negatively
affect our business. In contrast, China and Mexico continued to deliver
impressive performance on top of strong results a year ago. Canada also
continued to post robust sales, driven by a focus on food taste, value and
service."
Xxxx Xxxxxxx, President - McDonald's USA, said, "Our sales showed increased
momentum throughout the third quarter. Early signs indicate our Brand
Reinvention initiatives are growing our core business. These initiatives
include freshening the look of our restaurants, developing our people, enhancing
drive-thru service, providing everyday local value and introducing new tastes
and variety to meet our customers' changing tastes. Customer perception scores
for food taste, freshness and appearance are trending positively from coast to
coast. And our new advertising campaign, 'We love to see you smile!' has
resonated with consumers. According to a recent independent poll, key consumer
targets view the campaign favorably and rate it highly for effectiveness."
OPERATING RESULTS
McDonald's operates primarily in the quick-service hamburger restaurant
business. In addition, the Company operates other restaurant concepts: Aroma
Cafe, Boston Market, Chipotle Mexican Grill and Donatos Pizza. 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 nine 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 due to expansion and positive comparable sales. Foreign currency
translation had a negative effect on the growth rates for both Systemwide sales
and revenues for the quarter and nine months. The stronger Japanese Yen had a
greater positive currency translation effect on sales compared with 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 primarily due to the addition of Other Brands and the
consolidation of Argentina and Indonesia, for financial reporting purposes,
beginning in first quarter 2000.
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Systemwide sales
Dollars in millions 2000 1999 Increase/(Decrease)
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As In Constant
Reported Currencies*
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Quarters ended September 30
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U.S. $ 5,051.4 $ 4,870.8 4% n/a
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Europe 2,449.9 2,458.1 - 13%
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Asia/Pacific 1,820.2 1,725.1 6 5
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Latin America 456.2 431.9 6 5
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Other** 734.7 511.9 44 44
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Total Systemwide sales $10,512.4 $ 9,997.8 5% 8%
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Nine months ended September 30
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U.S. $14,748.9 $14,324.0 3% n/a
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Europe 7,082.4 7,107.2 - 11%
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Asia/Pacific 5,302.1 4,738.7 12 8
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Latin America 1,319.8 1,227.6 8 9
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Other** 1,803.5 1,343.5 34 34
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Total Systemwide sales $30,256.7 $28,741.0 5% 7%
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* Excluding the effect of foreign currency translation on reported results.
** Includes Other Brands systemwide sales of $219.0 million and $378.2 million
for the quarter and nine months of 2000, respectively. In 1999, Other
Brands systemwide sales were $36.3 million and $46.1 million for the
quarter and nine months, respectively.
n/a Not applicable
U.S. sales increased four percent for the quarter and three percent for the
nine months due to expansion and positive comparable sales. The positive
comparable sales for the quarter were driven by local market initiatives and
"McDonald's Taste Trials" promotion associated with the 2000 Olympics.
In Europe, expansion and positive comparable sales drove the constant
currency sales increases for the quarter and the nine months. This segment
benefited from strong performances in France, the Netherlands and Spain for both
periods and Germany for the quarter. Italy and the United Kingdom also
contributed significantly to the increases for both periods.
In Asia/Pacific and Latin America, the constant currency sales increases
were driven by expansion, partly offset by negative comparable sales for the
quarter and nine months. Weak consumer spending continued to negatively affect
many markets in these segments. However, China and Mexico posted strong positive
comparable sales in both periods.
In the Other segment, the increases were primarily driven by the addition
of Other Brands, as well as positive comparable sales and expansion in Canada
and South Africa for both periods.
Combined Operating Margins
The following combined operating margin information represents margins for
McDonald's restaurant business only.
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Combined operating margins Quarters ended Nine months ended
September 30 September 30
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2000 1999 2000 1999
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Dollars in millions
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Company-operated $ 453.1 $ 455.3 $1,284.6 $1,265.3
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Franchised 788.0 782.7 2,281.3 2,252.5
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Combined operating margins $1,241.1 $1,238.0 $3,565.9 $3,517.8
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Percent of sales/revenues
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Company-operated 17.7% 18.6% 17.3% 17.9%
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Franchised 80.4 80.7 79.7 80.5
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Combined operating margin dollars increased $3.1 million for the quarter
and $48.1 million for the nine months. In constant currencies, combined
operating margin dollars increased by $59.9 million for the quarter and $180.6
million for the nine months; a growth rate of five percent in both periods. The
U.S. and Europe segments accounted for over 80 percent of the combined margin
dollars in both periods.
As a percent of sales, consolidated Company-operated margins decreased for
the quarter and nine months. Food & paper costs and occupancy & other operating
expenses increased as a percent of sales for both periods, while payroll costs
as a percent of sales were flat for the quarter and decreased slightly for the
nine months.
Company-operated margins also decreased as a percent of sales for the
quarter and nine months for each segment. In the U.S., payroll costs as a
percent of sales increased for both periods. As a percent of sales, food &
paper costs increased for the quarter and decreased for the nine months, while
occupancy & other operating expenses decreased for the quarter and increased for
the nine months.
Europe's Company-operated margin decrease for the quarter was primarily due
to higher food & paper costs as a percent of sales, partly offset by lower
payroll costs. For the nine months, Europe's decrease was primarily due to
higher payroll costs and occupancy & other operating expenses as a percent of
sales. In both periods, Latin America's decreases were partly offset by the
consolidation of Argentina.
Franchised margins as a percent of applicable revenues decreased for the
quarter and nine 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 because the financing costs implicit in the lease are
included in occupancy expense, whereas for owned sites, financing costs are
reflected in interest expense.
Higher occupancy costs negatively impacted franchised margins in all
segments for both periods. Additionally, 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 11 percent for the
quarter and 10 percent for the nine months. The increases were primarily due to
spending to support the development of Other Brands and the consolidation of
Argentina and Indonesia. Excluding Other Brands and the consolidations,
selling, general & administrative expenses increased two percent for the quarter
and three percent for the nine 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 nine months 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 for the quarter and nine months was primarily due to lower
provisions for property dispositions, higher gains on sales of excess property,
costs in 1999 associated with the implementation of our Made For You food
preparation system and the write-off of software in second quarter 1999.
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Other operating income and expense Quarters ended Nine months ended
September 30 September 30
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Dollars in millions 2000 1999 2000 1999
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Gains on sales of restaurant businesses $20.5 $ 16.2 $ 58.4 $ 38.6
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Equity in earnings of unconsolidated
affiliates 32.9 35.7 92.8 109.6
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Other 7.2 (18.0) (10.6) (93.6)
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Total $60.6 $ 33.9 $140.6 $ 54.6
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Operating Income
Consolidated operating income increased $3.1 million for the quarter and,
in constant currencies, $47.2 million, or five percent. For the nine months,
consolidated operating income increased $52.9 million and, in constant
currencies, $149.2 million or six percent. The constant currency increases for
both periods 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.
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Operating income Increase/(Decrease)
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As In Constant
Dollars in millions 2000 1999 Reported Currencies*
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Quarters ended September 30
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U.S. $ 426.2 $ 389.6 9% n/a
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Europe 313.5 324.8 (3) 10%
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Asia/Pacific 117.2 119.8 (2) -
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Latin America 29.8 36.5 (18) (20)
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Other** 24.1 37.0 (35) (35)
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Total operating income $ 910.8 $ 907.7 -% 5%
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Nine months ended September 30
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U.S. $1,213.8 $1,132.8 7% n/a
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Europe 856.8 881.1 (3) 9%
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Asia/Pacific 333.1 305.0 9 8
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Latin America 82.9 94.1 (12) (11)
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Other** 69.1 89.8 (23) (24)
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Total operating income $2,555.7 $2,502.8 2% 6%
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* Excluding the effect of foreign currency translation on reported results.
** Includes Other Brands operating losses of $15.5 million and $33.4 million
for the quarter and nine months of 2000, respectively. In 1999, Other Brands
operating losses were $1.3 million and $2.6 million for the quarter and nine
months, respectively.
n/a Not applicable
U.S. operating income increased $36.6 million, or nine percent, for the
quarter and $81.0 million, or seven percent, for the nine months. The increases
for both periods were driven by higher combined operating margin dollars and
higher other operating income. Selling, general, and administrative expenses
increased slightly for the quarter and were relatively flat for the nine months.
Europe's operating income increased 10 percent for the quarter and nine
percent for the nine months in constant currencies. Strong results in France,
Italy and Spain drove this segment's performance in both periods. Germany's
strong performance for the quarter also contributed significantly to the
increase.
Operating income in Asia/Pacific was flat for the quarter and increased
eight percent for the nine months in constant currencies. This segment benefited
in both periods from strong performances in China and South Korea, while
Australia's drop in retail spending had a significant negative impact on
results. 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 for the nine months.
Latin America's operating income decreased 20 percent for the quarter and
11 percent for the nine months in constant currencies. Both periods were
negatively impacted by the continuing difficult economic conditions experienced
by most markets in the region. Strong performance in Mexico, as well as the
consolidation of Argentina, partly offset the decreases in both periods.
In the Other segment, strong performance in Canada was offset by the
investment spending for Other Brands for the quarter and nine months.
INTEREST, NONOPERATING EXPENSE AND INCOME TAXES
For both periods, higher interest expense was primarily due to higher average
debt levels, partly offset by 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 for the quarter reflected translation gains
in 2000 compared with translation losses in 1999 and lower minority interest
expense. For the nine months, nonoperating (income) expense also reflected
lower minority interest expense as well as lower translation losses and a gain
related to the sale of a partial ownership interest in a majority-owned
subsidiary outside the U.S.
The third quarter effective income tax rate was 30.5 percent compared with
32.4 percent in 1999. The effective tax rate for the nine months was 31.4
percent compared with 32.8 percent in 1999. The decrease in the income tax rate
was the result of a tax benefit resulting from an international transaction.
For the full year, the tax rate is expected to be about 31.4 percent.
WEIGHTED AVERAGE SHARES
Weighted average shares outstanding for the third quarter and nine 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.
The Company repurchased $426 million or 12.3 million shares of its common stock
in the third quarter, bringing the total for the first nine months of 2000 to
48.0 million shares for approximately $1.7 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
(particularly the Euro) 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
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Inc/(Dec)
Quarters ended September 30, 2000 1999 $ %
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SYSTEMWIDE SALES $10,512.4 $9,997.8 514.6 5
Revenues
Sales by Company-operated
restaurants 2,768.5 2,474.4 294.1 12
Revenues from franchised
and affiliated restaurants 980.5 969.8 10.7 1
TOTAL REVENUES 3,749.0 3,444.2 304.8 9
Operating costs and expenses
Company-operated
restaurants 2,297.6 2,015.6 282.0 14
Franchised restaurants
--occupancy costs 192.0 186.8 5.2 3
Selling, general &
administrative expenses 409.2 368.0 41.2 11
Other operating (income)
expense (60.6) (33.9) (26.7) n/m
Total operating costs
and expenses 2,838.2 2,536.5 301.7 12
OPERATING INCOME 910.8 907.7 3.1 -
Interest expense 111.4 95.4 16.0 17
Nonoperating (income)
expense 10.3 12.0 (1.7) n/m
Income before provision
for income taxes 789.1 800.3 (11.2) (1)
Provision for
income taxes 240.6 259.4 (18.8) (7)
NET INCOME $ 548.5 $ 540.9 7.6 1
NET INCOME PER
COMMON SHARE $ 0.42 $ 0.40 0.02 5
NET INCOME PER
COMMON SHARE-DILUTED $ 0.41 $ 0.39 0.02 5
Weighted average
common shares outstanding 1,315.6 1,354.7
Weighted average
common shares outstanding
-diluted 1,346.0 1,403.1
n/m Not meaningful
McDONALD'S CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Dollars and shares in millions, except per common share data
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Inc/(Dec)
Nine months ended September 30, 2000 1999 $ %
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SYSTEMWIDE SALES $30,256.7 $28,741.0 1,515.7 5
Revenues
Sales by Company-operated
restaurants 7,790.4 7,087.6 702.8 10
Revenues from franchised
and affiliated restaurants 2,863.0 2,798.8 64.2 2
TOTAL REVENUES 10,653.4 9,886.4 767.0 8
Operating costs and expenses
Company-operated
restaurants 6,477.7 5,818.8 658.9 11
Franchised restaurants
--occupancy costs 580.4 546.0 34.4 6
Selling, general &
administrative expenses 1,180.2 1,073.4 106.8 10
Other operating (income)
expense (140.6) (54.6) (86.0) n/m
Total operating costs
and expenses 8,097.7 7,383.6 714.1 10
OPERATING INCOME 2,555.7 2,502.8 52.9 2
Interest expense 318.0 298.1 19.9 7
Nonoperating (income)
expense 12.9 30.9 (18.0) n/m
Income before provision
for income taxes 2,224.8 2,173.8 51.0 2
Provision for
income taxes 699.5 712.1 (12.6) (2)
NET INCOME $ 1,525.3 $ 1,461.7 63.6 4
NET INCOME PER
COMMON SHARE $ 1.15 $ 1.08 0.07 6
NET INCOME PER
COMMON SHARE-DILUTED $ 1.12 $ 1.04 0.08 8
Weighted average
common shares outstanding 1,328.7 1,355.8
Weighted average
common shares outstanding
-diluted 1,364.2 1,405.4
n/m Not meaningful
XxXXXXXX'X CORPORATION SYSTEMWIDE SALES
Dollars in millions
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% Inc/(Dec)
Quarters ended September 30, 2000 1999 As In Constant
Reported Currencies*
-----------------------------------------------------------------------------
US
Operated by franchisees $3,964.7 $3,807.4 4
Operated by the Company 782.9 752.9 4
Operated by affiliates 303.8 310.5 (2)
5,051.4 4,870.8 4 n/a
Europe
Operated by franchisees 1,372.8 1,349.9 2
Operated by the Company 957.3 986.6 (3)
Operated by affiliates 119.8 121.6 (1)
2,449.9 2,458.1 - 13
Asia/Pacific
Operated by franchisees 456.2 467.1 (2)
Operated by the Company 469.0 445.9 5
Operated by affiliates 895.0 812.1 10
1,820.2 1,725.1 6 5
Latin America
Operated by franchisees 237.6 213.5 11
Operated by the Company 198.7 126.4 57
Operated by affiliates 19.9 92.0 (78)
456.2 431.9 6 5
Other**
Operated by franchisees 360.5 324.1 11
Operated by the Company 360.6 162.6 122
Operated by affiliates 13.6 25.2 (46)
734.7 511.9 44 44
Systemwide
Operated by franchisees 6,391.8 6,162.0 4
Operated by the Company 2,768.5 2,474.4 12
Operated by affiliates 1,352.1 1,361.4 (1)
$10,512.4 $9,997.8 5 8
* Excluding the effect of foreign currency translation on reported results.
** The Other segment includes $219.0 million of sales in 2000 and $36.3 million
in 1999 related to Other Brands.
XxXXXXXX'X CORPORATION SYSTEMWIDE SALES
Dollars in millions
------------------------------------------------------------------------
% Inc/(Dec)
Nine months ended September 30, 2000 1999 As In Constant
Reported Currencies*
------------------------------------------------------------------------
US
Operated by franchisees $11,561.7 $11,198.7 3
Operated by the Company 2,283.1 2,228.1 2
Operated by affiliates 904.1 897.2 1
14,748.9 14,324.0 3 n/a
Europe
Operated by franchisees 3,920.2 3,871.6 1
Operated by the Company 2,807.7 2,874.0 (2)
Operated by affiliates 354.5 361.6 (2)
7,082.4 7,107.2 - 11
Asia/Pacific
Operated by franchisees 1,363.5 1,317.8 3
Operated by the Company 1,364.6 1,209.5 13
Operated by affiliates 2,574.0 2,211.4 16
5,302.1 4,738.7 12 8
Latin America
Operated by franchisees 686.7 602.4 14
Operated by the Company 557.2 366.8 52
Operated by affiliates 75.9 258.4 (71)
1,319.8 1,227.6 8 9
Other**
Operated by franchisees 989.6 870.0 14
Operated by the Company 777.8 409.2 90
Operated by affiliates 36.1 64.3 (44)
1,803.5 1,343.5 34 34
Systemwide
Operated by franchisees 18,521.7 17,860.5 4
Operated by the Company 7,790.4 7,087.6 10
Operated by affiliates 3,944.6 3,792.9 4
$30,256.7 $28,741.0 5 7
* Excluding the effect of foreign currency translation on reported results.
** The Other segment includes $378.2 million of sales in 2000 and $46.1 million
in 1999 related to Other Brands.
McDONALD'S CORPORATION TOTAL REVENUES
Dollars in millions
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% Inc/(Dec)
Quarters ended As In Constant
September 30, 2000 1999 Reported Currencies*
------------------------------------------------------------------
U.S. $ 1,347.7 $1,303.1 3 n/a
Europe 1,229.3 1,258.0 (2) 9
Asia/Pacific 520.4 503.9 3 6
Latin America 246.4 174.2 41 41
Other** 405.2 205.0 98 99
$ 3,749.0 $3,444.2 9 13
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% Inc/(Dec)
Nine months ended As In Constant
September 30, 2000 1999 Reported Currencies*
------------------------------------------------------------------
U.S. $ 3,937.3 $3,834.2 3 n/a
Europe 3,590.3 3,651.3 (2) 8
Asia/Pacific 1,523.5 1,374.2 11 12
Latin America 701.1 503.6 39 41
Other** 901.2 523.1 72 72
$10,653.4 $9,886.4 8 12
* Excluding the effect of foreign currency translation on reported results.
** The Other segment revenue related to Other Brands for the third quarter and
nine months 2000 was $208.6 million and $347.1 million, respectively. In
1999, revenue related to Other Brands was $22.2 million for both the quarter
and nine months.
McDONALD'S CORPORATION OPERATING MARGINS
OPERATING MARGINS - McDONALD'S RESTAURANT BUSINESS**
-------------------------------------------------------------------------
% Inc/(Dec)
Quarters ended Percent Amount As In Constant
September 30, 2000 1999 2000 1999 Reported Currencies*
-------------------------------------------------------------------------
Company-operated
U.S. 17.1% 17.2% $ 133.9 $ 129.2 4 n/a
Europe 19.9 20.2 190.2 199.6 (5) 6
Asia/Pacific 16.8 18.9 78.6 84.2 (7) (5)
Latin America 12.8 15.0 25.5 18.9 35 32
Other 16.3 16.6 24.9 23.4 6 7
Total 17.7% 18.6% $ 453.1 $ 455.3 - 4
Franchised
U.S. 80.9% 81.2% $ 456.8 $ 446.6 2 n/a
Europe 80.1 79.9 217.8 216.9 - 15
Asia/Pacific 83.1 84.0 42.7 48.7 (12) (5)
Latin America 73.4 77.0 35.0 36.8 (5) (5)
Other 81.0 80.0 35.7 33.7 6 6
Total 80.4% 80.7% $ 788.0 $ 782.7 1 5
-------------------------------------------------------------------------
% Inc/(Dec)
Nine months ended Percent Amount As In Constant
September 30, 2000 1999 2000 1999 Reported Currencies*
-------------------------------------------------------------------------
Company-operated
U.S. 17.1% 17.8% $ 391.0 $ 396.2 (1) n/a
Europe 18.7 19.1 525.2 548.1 (4) 5
Asia/Pacific 17.0 17.3 232.0 209.5 11 11
Latin America 12.8 14.1 71.1 51.6 38 39
Other 15.1 15.5 65.3 59.9 9 9
Total 17.3% 17.9% $1,284.6 $1,265.3 2 5
Franchised
U.S. 80.5% 81.3% $1,331.9 $1,305.3 2 n/a
Europe 78.6 79.0 614.9 614.0 - 13
Asia/Pacific 82.6 83.6 131.3 137.7 (5) (1)
Latin America 74.1 77.6 106.7 106.1 1 2
Other 79.0 78.7 96.5 89.4 8 8
Total 79.7% 80.5% $2,281.3 $2,252.5 1 5
* Excluding the effect of foreign currency translation on reported results.
** Operating margin information relates to McDonald's restaurant business and
excludes Other Brands.
XxXXXXXX'X CORPORATION FINANCIAL INFORMATION
COMPANY-OPERATED MARGINS AS A PERCENT OF SALES -
McDONALD'S RESTAURANT BUSINESS*
-------------------------------------------------------------------------
Quarters ended September 30 Nine months ended September 30
2000 1999 2000 1999
-------------------------------------------------------------------------
Food & paper 34.1 33.4 34.0 33.7
Payroll & employee
benefits 25.0 25.0 25.3 25.4
Occupancy & other
operating expenses 23.2 23.0 23.4 23.0
Total expenses 82.3 81.4 82.7 82.1
Company-operated margins 17.7 18.6 17.3 17.9
* Operating margin information relates to McDonald's restaurant business and
excludes Other Brands.
XxXXXXXX'X CORPORATION RESTAURANT INFORMATION
SYSTEMWIDE RESTAURANTS
----------------------------------------------------
At September 30, 2000 1999 Inc/(Dec)
----------------------------------------------------
U.S.* 12,703 12,529 174
Europe
Germany 1,061 972 89
England 920 842 78
France 822 756 66
Italy 269 222 47
Spain 251 204 47
Sweden 219 191 28
Netherlands 203 192 11
Poland 172 150 22
Other 1,326 1,160 166
Total Europe 5,243 4,689 554
Asia/Pacific
Japan* 3,413 3,073 340
Australia 702 674 28
Taiwan 336 317 19
China 294 244 50
Philippines 230 206 24
Hong Kong 225 158 67
South Korea 171 158 13
Other 618 569 49
Total Asia/Pacific 5,989 5,399 590
Latin America
Brazil* 1,024 805 219
Argentina 227 186 41
Mexico 190 158 32
Other 542 471 71
Total Latin America 1,983 1,620 363
Other
Canada* 1,131 1,111 20
Other McDonald's 483 411 72
Other Brands 922 195 727
Total Other 2,536 1,717 819
Systemwide restaurants 28,454 25,954 2,500
Countries 120 117 3
* Includes satellites in 2000: U.S. 1,000; Japan 1,429; Brazil 517; Canada 270.
In 1999: U.S. 1,044; Japan 1,235; Brazil 377; Canada 237.
XxXXXXXX'X CORPORATION RESTAURANT INFORMATION
RESTAURANT ADDITIONS
-----------------------------------------------------------------------
Quarters ended September 30 Nine months ended September 30
2000 1999 2000 1999
-----------------------------------------------------------------------
U.S. 45 39 74 57
Europe 111 131 300 268
Asia/Pacific 158 138 334 344
Latin America 60 66 194 215
Other - McDonald's 22 44 40 75
Other Brands 12 170 706 177
Systemwide additions 408 588 1,648 1,136
SYSTEMWIDE RESTAURANTS
-------------------------------------------------------------------
At September 30, 2000 1999 Inc/(Dec)
-------------------------------------------------------------------
US
Operated by franchisees 10,079 9,899 180
Operated by the Company 1,858 1,831 27
Operated by affiliates 766 799 (33)
12,703 12,529 174
Europe
Operated by franchisees 2,950 2,547 403
Operated by the Company 2,070 1,934 136
Operated by affiliates 223 208 15
5,243 4,689 554
Asia/Pacific
Operated by franchisees 1,594 1,425 169
Operated by the Company 1,421 1,215 206
Operated by affiliates 2,974 2,759 215
5,989 5,399 590
Latin America
Operated by franchisees 1,038 841 197
Operated by the Company 857 491 366
Operated by affiliates 88 288 (200)
1,983 1,620 363
Other
Operated by franchisees 1,122 1,062 60
Operated by the Company 1,324 572 752
Operated by affiliates 90 83 7
2,536 1,717 819
Systemwide
Operated by franchisees 16,783 15,774 1,009
Operated by the Company 7,530 6,043 1,487
Operated by affiliates 4,141 4,137 4
28,454 25,954 2,500
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