EXHIBIT 99
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Investor Release
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FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
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09/19/01 Investors: Xxxx Xxxxx, 000-000-0000
Media: Xxxx Xxxxxxxx, 000-000-0000
McDONALD'S THIRD QUARTER 2001 UPDATE
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OAK BROOK, XX - Xxxx X. Xxxxxxxxx, Chairman and Chief Executive Officer,
noted, "Before commenting on our third quarter update, I'd like to first
express, on behalf of the worldwide McDonald's family, our deepest sympathy
to all the families and friends of the victims of the September 11 national
tragedy. I am proud that our System - franchisees, suppliers, and the Company
- has been able to support those heroes at the front lines by providing
countless meals to search and rescue workers and other volunteers, and, along
with all Americans, provide solidarity and assistance through numerous
charitable donations and fundraising efforts."
McDonald's Corporation announced that earnings per share for the third
quarter 2001 are expected to be 41-42 cents on a reported basis, or 43-44
cents in constant currencies*, compared with 41 cents in the third quarter
2000. Third quarter 2001 results will include a $137 million after-tax gain
related to the initial public offering of XxXxxxxx'x Japan and an after-tax
charge of nearly $100 million. The charge primarily relates to approximately
160 restaurant closings, associated with our previously announced review of
underperforming restaurants.
Xxxxxxxxx noted, "We are encouraged by the improvement we've seen in
the third quarter, and we are hopeful this will continue into the fourth
quarter. The U.S. achieved positive comparable sales in both July and August.
We believe our continued focus on quality, service, cleanliness and value,
the foundation of our business, is key to driving sales and profits now and
in the future.
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"In Europe, comparable sales were negative in July, but turned positive
in August. France continued its strong positive comparable sales trend and
Germany showed significant improvement in August compared with the first half
of the year. So, while our European results are not back to where we want
them to be, we are encouraged by recent performance, and expect the fourth
quarter to be even stronger.
"On a global basis, we are increasing our emphasis on strategic
priorities - people, operational excellence and profitability - which will
result in more focus and reduced costs. To that end, in the fourth quarter,
we expect to announce plans to reduce selling, general and administrative
expenses, which may result in a special charge to earnings.
"We expect earnings per share for the year to be relatively flat in
constant currencies versus last year, including the Japan IPO gain and the
charge primarily related to restaurant closings, and excluding any special
charge that may result from our efforts to reduce selling, general and
administrative costs. This guidance reflects our expectation for significant
improvements in the second half of the year compared with the first half,
most of which is anticipated in the fourth quarter. While we cannot predict
currency fluctuations, if foreign currency exchange rates remain constant for
the remainder of the year, translation will reduce full-year reported
earnings per share by about 5 cents.
"Despite this year's challenges, McDonald's has a great brand with
tremendous prospects. The worldwide eating out market continues to grow, and
McDonald's intends to be part of that growth. I am confident in our business
fundamentals and believe we can deliver solid earnings and cash flow growth
far into the future."
McDonald's Systemwide sales for the first eight months of 2001
increased to $27.2 billion, up 5 percent in constant currencies over the same
period last year. For the first two months of the third quarter, Systemwide
sales were up 4 percent in constant currencies, compared with the same period
last year.
In Europe, constant currency sales grew 4 percent for the first eight
months of the year and 5 percent for the first two months of the third
quarter 2001. Sales in the
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U.S. grew 2 percent in the first eight months and 4 percent quarter-to-date
through August. In Asia/Pacific, constant currency sales were up 6 percent in
the first eight months of 2001 and 3 percent during the first two months of
this quarter. Constant currency sales in Latin America increased 10 percent
for the first eight months and 8 percent quarter-to-date through August.
Sales in the Other segment increased 23 percent in constant currencies for
the eight months (due primarily to the acquisition of Boston Market in second
quarter 2000) and 4 percent quarter-to-date through August.
McDonald's is the world's leading food service retailer with about
29,000 restaurants in 121 countries serving 45 million people each day.
Certain forward-looking statements are included in this release. They
use such words as "may," "will," "expect," "believe," "plan" and other
similar terminology. These statements reflect management's current
expectations regarding future events and operating performance and speak only
as of the date of this release. These forward-looking statements involve a
number of risks and uncertainties. The following are some of the factors that
could cause actual results to differ materially from those expressed in or
underlying our forward-looking statements: 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. The foregoing list of important factors is not exclusive.
The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
* 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.
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