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McDONALD'S REPORTS RECORD RESULTS; FOURTH QUARTER SALES, MARGINS AND OPERATING INCOME STRONG

 McDONALD'S REPORTS RECORD RESULTS;
 FOURTH QUARTER SALES, MARGINS AND OPERATING INCOME STRONG
 OAK BROOK, Ill., Jan. 29 /PRNewswire/ -- McDonald's Corporation (NYSE: MCD) today announced record results for the year and fourth quarter ended Dec. 31, 1991. Net income and net income per common share both rose 7% for the year; and 8% and 6%, respectively, for the quarter. Systemwide sales grew 6% for the year and 7% for the quarter; operating income rose 5% for the year and 6% for the quarter. Total revenues increased 1% for the year and 2% for the quarter despite the sale of certain company-operated restaurants to franchisees.
 McDonald's U.S. business improved in the fourth quarter and the results are reflected in U.S. annual operating income, which exceeded $1 billion for 1991, and growth in U.S. operating margins. Many international markets continued to report excellent results, in spite of the impact of changing foreign currencies. Excluding this impact, fourth quarter Systemwide sales and net income would have increased 9% and 10%, respectively.
 KEY HIGHLIGHTS Year Ended December 31
 (Dollars in millions, except Increase
 per common share amounts) 1991 1990 $ %
 .Systemwide sales $19,928.2 $18,758.9 1,169.3 6
 .Total revenues $ 6,695.0 $ 6,639.6 55.4 1
 .Operating income $ 1,678.5 $ 1,595.9 82.6 5
 .Net income $ 859.6 $ 802.3 57.3 7
 .Net income per common share $ 2.35 $ 2.20 .15 7
 Fourth Quarter Ended December 31
 Increase
 1991 1990 $ %
 .Systemwide sales $ 5,169.6 $ 4,820.1 349.5 7
 .Total revenues $ 1,729.8 $ 1,703.1 26.7 2
 .Operating income $ 410.2 $ 386.6 23.6 6
 .Net income $ 200.4 $ 186.2 14.2 8
 .Net income per common share $ .54 $ .51 .03 6


OPERATING RESULTS
 Systemwide sales represent sales by company-operated, franchised and affiliated restaurants. The increase in Systemwide sales for the year was due to new restaurant expansion and higher sales at existing restaurants outside of the U.S. The increase in Systemwide sales for the quarter was due to new restaurant expansion and higher sales at existing restaurants, partially offset by weaker European currencies.
 U.S. sales were positively affected by our value program through which trends in sales and transaction counts improved throughout 1991; by marketing and promotional programs, such as Happy Meals and the Indiana Jones holiday video; and by product promotions such as chicken fajitas and breakfast burritos. Gains from these efforts were partially offset by the economy, the Gulf War, and competition.
 Sales outside of the U.S. increased at a double-digit rate due to increased market penetration and higher sales at existing restaurants. These results were achieved in spite of the Gulf War and weak economies in several countries, particularly Canada and England. Many markets -- specifically Japan, France, Germany, Hong Kong, Netherlands, Australia, Switzerland, and Latin America as a group -- recorded excellent results.
 A total of 615 restaurants were added in 1991 (641 in 1990), including 427 outside of the U.S. (335 in 1990). An additional 99 restaurants were under construction at year-end (116 in 1990), including 69 outside of the U.S. (72 in 1990).
 The increases in Total Revenues for the year and quarter were less than the increase for Systemwide sales because of the sale of certain company-operated restaurant businesses to franchisees, and weaker European currencies. U.S. revenues declined in both periods primarily as a result of the sale of certain company-operated restaurant businesses to franchisees, the franchising of which improves profitability, yet reduces revenues. Revenues outside of the U.S. increased 8% for the year and 7% for the quarter, despite weaker European currencies.
 Company-operated restaurant margins improved to 17.9% of sales in 1991 from 17.6% for 1990. These margins improved to 18.0% for the quarter from 16.8% one year ago. For both periods, declines in food and packaging, payroll and employee benefits, and other operating costs as a percent of sales more than offset the increases in occupancy costs.
 Franchised restaurant margins were 82.8% of applicable revenues for 1991 and 1990. These margins were 82.6% for the quarter, compared to 82.0% one year ago.
 The increase in general, administrative and selling expenses for the year was due to higher advertising costs on a worldwide basis, and higher employee costs outside of the U.S. resulting from expansion. If advertising and promotion costs to launch the U.S. value program were excluded, U.S. general, administrative and selling expenses would not have increased in 1991.
 The increase in Operating income for the year reflected better results from franchised restaurants and affiliates, higher gains on sales of restaurant businesses ($64.0 million in 1991, compared to $60.6 million in 1990), offset by weaker European currencies. Gains on sales of real estate properties and strong operating performance in Japan contributed to greater income from affiliates ($57.5 million in 1991, compared to $32.0 million in 1990). U.S. Operating income rose 3% for the quarter, because of stronger sales and margins, despite lower gains on sales of restaurant businesses and higher provisions for property dispositions. Excluding the impact of changing foreign currencies, operating income outside of the U.S. increased 14% for the quarter, despite weak results in England.
 The increase in interest expense for the year was due to lower capitalized interest, as interest incurred was flat, reflecting the benefits of lower average interest rates and weaker European currencies.
 The effective income tax rate was 33.8% for 1991, compared to the 1990 annual rate of 35.6%, primarily due to the realization of greater tax benefits related to certain foreign operations.
 Six foreign currencies, which do not always move with the same magnitude or in the same direction, have the most significant impact on reported results: the Canadian and Australian Dollars, Japanese Yen, British Pound Sterling, German Deutschemark and French Franc.
 Stronger foreign currencies contributed to the growth in Systemwide sales, Total revenues, Operating income, and higher interest expense during the first half of 1991. This situation changed in the second half of 1991, as weaker foreign currencies negatively impacted Systemwide sales, Total revenues, and Operating income, while favorably impacting interest expense.
 The impact of changing foreign currencies differed between sales and operating income as a result of the mix of franchised, affiliated and company-operated restaurants, and varying contributions to profitability in markets outside of the U.S. If exchange rates had remained at 1990 levels, operating results would have been as follows:
 Year Ended December 31
 (Dollars in millions) Reported Adjusted
 $ % $ %
 Systemwide sales $19,928.2 6 $19,919.3 6
 Operating income $ 1,678.5 5 $ 1,688.0 6
 Net income $ 859.6 7 $ 865.5 8
 Fourth Quarter Ended December 31
 Reported Adjusted
 $ % $ %
 Systemwide sales $ 5,169.6 7 $ 5,239.1 9
 Operating income $ 410.2 6 $ 418.3 8
 Net income $ 200.4 8 $ 204.3 10
 -0- 1/29/92
 /Editor's Note: First and final add to follow/
 /CONTACT: Sharon Vuinovich (investors), 708-575-3395; or Chuck Ebeling (media), 708-575-6150, both of McDonald's Corporation/
 (MCD) CO: McDonald's Corporation ST: Illinois IN: REA SU: ERN


DA -- CL019 -- 4862 01/29/92 15:43 EST
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