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McDONALD'S REPORTS RECORD RESULTS; OPERATING RESULTS STRONG

 OAK BROOK, Ill., Jan. 27 /PRNewswire/ -- McDonald's Corporation (NYSE: MCD) today announced record results for the year and fourth quarter ended Dec. 31, 1992:
 NET INCOME PER COMMON SHARE ROSE 11 PERCENT FOR THE YEAR AND 13 PERCENT FOR THE QUARTER.
 NET INCOME GREW 12 PERCENT FOR THE YEAR AND 14 PERCENT FOR THE QUARTER.
 RESTAURANTS IN OPERATION AT YEAR-END EXCEEDED 13,000.
 OPERATING INCOME INCREASED 11 PERCENT FOR BOTH PERIODS.
 SYSTEMWIDE SALES GREW 10 PERCENT FOR BOTH PERIODS.
 KEY HIGHLIGHTS Years Ended December 31
 (Dollars in millions, except Increase
 per common share amounts) 1992 1991 $ Percent
 Systemwide sales $21,885.4 $19,928.2 1,957.2 10
 Total revenues $ 7,133.3 $ 6,695.0 438.3 7
 Operating income $ 1,861.6 $ 1,678.5 183.1 11
 Net income $ 958.6 $ 859.6 99.0 12
 Net income per common share $ 2.60 $ 2.35 .25 11
 Fourth Quarters Ended December 31
 Increase
 1992 1991 $ Percent
 Systemwide sales $ 5,711.6 $ 5,169.6 542.0 10
 Total revenues $ 1,828.4 $ 1,729.8 98.6 6
 Operating income $ 455.7 $ 410.2 45.5 11
 Net income $ 227.9 $ 200.4 27.5 14
 Net income per common share $ .61 $ .54 .07 13
 SUMMARY COMMENTARY
 McDonald's business continued to show improvement on a worldwide basis throughout 1992. The U.S. business benefited from the ongoing evolution of the value program established in 1991, coupled with major efforts in reducing operating and development costs. The international business benefited from expansion, improved operating results despite weak economies in several major markets and stronger foreign currencies.
 The company expects that openings will accelerate over the next several years, ranging from 700 to 900 restaurants per year. The company believes that McDonald's remains a teens growth company as measured over a five-year period of time, and its 1992 performance puts it on track to achieve that expectation.
 CONSOLIDATED OPERATING RESULTS
 Systemwide sales represent sales by company-operated, franchised and affiliated restaurants. The increases in Systemwide sales were due to new restaurant expansion and higher sales at existing restaurants worldwide. Stronger foreign currencies contributed to growth in the second and third quarters and for the year, while weaker foreign currencies tempered reported growth in the first and fourth quarters.
 A total of 675 restaurants were added in 1992 (615 in 1991), including 480 outside of the U.S. (427 in 1991). An additional 120 restaurants were under construction at year-end (99 in 1991), including 76 outside of the U.S. (69 in 1991).
 The increases in total revenues continued to register below the increases for Systemwide sales because of the licensing of certain company-operated restaurant businesses to franchisees in the U.S. and Canada.
 Company-operated restaurant margins improved to 19.1 percent of sales in 1992 from 17.9 percent one year ago. All costs declined as a percent of sales. For the fourth quarter, these margins were 19.4 percent in 1992 and 18.0 percent in 1991.
 Franchised restaurant margins were 82.8 percent of applicable revenues for 1992 and 1991. For the fourth quarter, these margins were 83.1 percent in 1992 and 82.6 percent in 1991.
 The increase in general, administrative and selling expenses for the year was due to higher employee costs associated with expansion, partially offset by a reduction in U.S. marketing costs associated with the value program. The fourth quarter increase reflected higher expenditures to support key priorities. Overall, G&A expenses were 3.9 percent of systemwide sales in 1992, slightly lower than the 4.0 percent in 1991.
 Other operating (income) expense--net is composed of operating transactions related to franchising and the food business such as gains on sales of restaurant businesses, equity in earnings of unconsolidated affiliates, and other items.
 Years Ended Fourth Quarters
 December 31 Ended December 31
 1992 1991 1992 1991
 (In millions of dollars)
 Gains on sales of
 restaurant businesses $(43.1) $ (64.0) $ (8.0) $(11.4)
 Equity in earnings of
 unconsolidated affiliates (29.5) (57.5) (7.6) (10.2)
 Other 8.6 7.7 14.2 16.9
 Other operating (income)
 expense--net $(64.0) $(113.8) $ (1.4) $ (4.7)
 The increases in operating income reflected better results from franchised restaurants and stronger company-operated restaurant margins, partially offset by lower income from other operating transactions. Changing foreign currencies helped results for the year and hurt the quarter.
 The decreases in interest expense were primarily due to lower average debt balances and lower average interest rates; and for the quarter, weaker foreign currencies.
 Nonoperating income (expense)--net included $28.8 million in charges related to various early redemptions of high-coupon, U.S. dollar debt in the first and fourth quarters.
 The effective income tax rate was 33.8 percent for 1992, the same as the 1991 annual rate.
 U.S. OPERATING RESULTS
 U.S. sales grew 6 percent for the year and 9 percent for the quarter, which was the strongest performance of any quarter since 1988. Sales and transaction counts were positively affected by the company's value program; by the Olympic promotion; and by marketing and promotional efforts such as Batman, the Extra-Value Meal NBA Trading Cards, Holiday Videos and value-priced promotions in the form of 2 Egg McMuffins or Big Macs for $2 and the $2.99 Big Mac Extra-Value Meal.
 U.S. revenues increased 1 percent for the year and 4 percent for the quarter, primarily as a result of strong sales, offset by the licensing of certain Company-operated restaurant businesses to franchisees. Licensing these restaurants improves consolidated profits, but reduces total revenues.
 U.S. operating income increased 4 percent for the year and rose 11 percent for the quarter. The improvement in performance was driven by strong sales and margins at both franchised and company-operated restaurants. The annual increase was impacted by lower gains on sales of restaurant businesses in 1992 and a gain on the sale of real estate by a U.S. affiliate in 1991.
 OPERATING RESULTS OUTSIDE OF THE U.S.
 Sales outside of the U.S. rose 17 percent for the year and 13 percent for the quarter due to increased market penetration and higher sales at existing restaurants. Changing foreign currencies helped results for the year and hurt the quarter. Many markets -- specifically Australia, Austria, France, Germany, Hong Kong, Netherlands, Philippines, Singapore, Spain, Sweden and Switzerland -- achieved excellent sales gains. Economies remained weak in Canada and England; however, both markets made progress in building sales. Operating results in Japan remained weak as a result of the economy and competition.
 Revenues outside of the U.S. increased 13 percent for the year and 7 percent for the quarter. The fourth quarter was negatively impacted by weaker foreign currencies in Canada and England.
 Operating income outside of the U.S. grew 21 percent for the year and 12 percent for the quarter. These results reflected accelerated expansion and strong operating performance, despite weak economies in several major markets. Changing foreign currencies helped results for the year and hurt the quarter. The year benefited from the favorable settlement of a sales tax case in Brazil. The quarter was negatively impacted by lower gains from property dispositions of an affiliate.
 IMPACT OF FOREIGN CURRENCY
 If exchange rates had remained at 1991 levels, consolidated operating results for 1992 would have been as follows:
 Year Ended December 31
 (Dollars in millions) Reported Adjusted
 $ Pct $ Pct
 Systemwide sales $21,885.4 10 $21,716.7 9
 Operating income $ 1,861.6 11 $ 1,846.3 10
 Net income $ 958.6 12 $ 952.7 11
 Fourth Quarter Ended December 31
 Reported Adjusted
 $ Pct $ Pct
 Systemwide sales $ 5,711.6 10 $ 5,746.3 11
 Operating income $ 455.7 11 $ 460.2 12
 Net income $ 227.9 14 $ 227.8 14
 McDONALD'S CORPORATION
 Financial Information
 (In millions of dollars)
 Years Ended December 31
 Increase(Decrease)
 1992 1991 $ Percent
 SYSTEMWIDE SALES
 U.S.
 Operated by franchisees $10,615.2 $ 9,873.8 741.4 8
 Operated by the Company 2,352.5 2,409.8 (57.3) (2)
 Operated by affiliates 275.6 235.8 39.8 17
 13,243.3 12,519.4 723.9 6
 Outside of the U.S.
 Operated by franchisees 3,859.0 3,084.7 774.3 25
 Operated by the Company 2,750.0 2,498.7 251.3 10
 Operated by affiliates 2,033.1 1,825.4 207.7 11
 8,642.1 7,408.8 1,233.3 17
 $21,885.4 $19,928.2 1,957.2 10
 By Type
 Operated by franchisees $14,474.2 $12,958.5 1,515.7 12
 Operated by the Company 5,102.5 4,908.5 194.0 4
 Operated by affiliates 2,308.7 2,061.2 247.5 12
 $21,885.4 $19,928.2 1,957.2 10
 TOTAL REVENUES
 U.S. $ 3,749.4 $ 3,710.2 39.2 1
 Outside of the U.S. 3,383.9 2,984.8 399.1 13
 $ 7,133.3 $ 6,695.0 438.3 7
 OPERATING INCOME
 U.S. $ 1,041.6 $ 1,000.4 41.2 4
 Outside of the U.S. 820.0 678.1 141.9 21
 $ 1,861.6 $ 1,678.5 183.1 11
 PERCENT CONTRIBUTION TO
 CONSOLIDATED MARGINS Company-operated Franchised
 1992 1991 1992 1991
 U.S. 44 47 69 73
 Outside of the U.S. 56 53 31 27
 100 100 100 100
 McDONALD'S CORPORATION
 Restaurant Information
 At December 31
 Increase(Decrease)
 1992 1991 Number Percent
 U.S.
 Operated by franchisees 7,375 7,149 226 3
 Operated by the Company 1,395 1,446 (51) (4)
 Operated by affiliates 189 169 20 12
 8,959 8,764 195 2
 Outside of the U.S.
 Operated by franchisees 1,862 1,586 276 17
 Operated by the Company 1,156 1,101 55 5
 Operated by affiliates 1,116 967 149 15
 4,134 3,654 480 13
 13,093 12,418 675 5
 By Type
 Operated by franchisees 9,237 8,735 502 6
 Operated by the Company 2,551 2,547 4 -
 Operated by affiliates 1,305 1,136 169 15
 13,093 12,418 675 5
 Restaurants in Major Markets Outside of the U.S.
 Japan 956 865
 Canada 658 642
 Germany 438 391
 England 430 400
 Australia 338 304
 France 239 193
 Brazil 107 84
 Other 968 775
 4,134 3,654
 McDONALD'S CORPORATION
 Condensed Consolidated Statement of Income
 (Dollars and shares in millions, except per common share amounts)
 Years Ended December 31
 Increase(Decrease)
 1992 1991 $ Percent
 SYSTEMWIDE SALES $21,885.4 $19,928.2 1,957.2 10
 Revenues
 Sales by Company-
 operated restaurants $ 5,102.5 $ 4,908.5 194.0 4
 Revenues from
 franchised restaurants 2,030.8 1,786.5 244.3 14
 TOTAL REVENUES 7,133.3 6,695.0 438.3 7
 Operating costs and expenses
 Company-operated restaurants 4,126.5 4,029.1 97.4 2
 Franchised restaurants 348.6 306.5 42.1 14
 General, administrative
 and selling expenses 860.6 794.7 65.9 8
 Other operating (income)
 expense--net (64.0) (113.8) 49.8 (44)
 Total operating
 costs and expenses 5,271.7 5,016.5 255.2 5
 OPERATING INCOME 1,861.6 1,678.5 183.1 11
 Interest expense 373.6 391.4 (17.8) (5)
 Nonoperating income
 (expense)--net (39.9) 12.3 (52.2) N/M
 Income before provision
 for income taxes 1,448.1 1,299.4 148.7 11
 Provision for income taxes 489.5 439.8 49.7 11
 NET INCOME $ 958.6 $ 859.6 99.0 12
 NET INCOME PERCOMMON
 SHARE(A) $ 2.60 $ 2.35 .25 11
 Weighted average common
 shares outstanding 363.2 358.1
 (A) -- Computed using net income reduced by preferred stock dividends of $14.7 million (net of tax) and $19.2 million for 1992 and 1991, respectively.
 N/M - Not Meaningful
 McDONALD'S CORPORATION
 Condensed Consolidated Statement of Income
 (Dollars and shares in millions, except per common share amounts)
 Fourth Quarters Ended December 31
 Increase(Decrease)
 1992 1991 $ Percent
 SYSTEMWIDE SALES $ 5,711.6 $ 5,169.6 542.0 10
 Revenues
 Sales by Company-
 operated restaurants $ 1,294.9 $ 1,261.7 33.2 3
 Revenues from
 franchised restaurants 533.5 468.1 65.4 14
 TOTAL REVENUES 1,828.4 1,729.8 98.6 6
 Operating costs and expenses
 Company-operated restaurants 1,044.4 1,034.2 10.2 1
 Franchised restaurants 90.1 81.3 8.8 11
 General, administrative
 and selling expenses 239.6 208.8 30.8 15
 Other operating (income)
 expense--net (1.4) (4.7) 3.3 (70)
 Total operating
 costs and expenses 1,372.7 1,319.6 53.1 4
 OPERATING INCOME 455.7 410.2 45.5 11
 Interest expense 86.4 98.7 (12.3) (12)
 Nonoperating income
 (expense)--net (25.0) (8.6) (16.4) N/M
 Income before provision
 for income taxes 344.3 302.9 41.4 14
 Provision for income taxes 116.4 102.5 13.9 14
 NET INCOME $ 227.9 $ 200.4 27.5 14
 NET INCOME PER COMMON
 SHARE(A) $ .61 $ .54 .07 13
 Weighted average common
 shares outstanding 364.1 358.1
 (A) -- Computed using net income reduced by preferred stock dividends of $4.9 million (net of tax) and $5.3 million for the fourth quarters of 1992 and 1991, respectively.
 N/M - Not Meaningful
 -0- 1/27/93
 /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: LEI SU: ERN

KK -- CL003 -- 9745 01/27/93 14:35 EST
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Date:Jan 27, 1993
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