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McDONALD'S REPORTS RECORD RESULTS; OPERATING RESULTS STRONG

 McDONALD'S REPORTS RECORD RESULTS;
 OPERATING RESULTS STRONG
 OAK BROOK, Ill., Oct. 22 /PRNewswire/ -- McDonald's Corporation (NYSE: MCD) today announced record results for the nine months and third quarter ended Sept. 30, 1992:
 OPERATING INCOME INCREASED 11 PERCENT FOR THE NINE MONTHS, AND 13 PERCENT FOR THE QUARTER.
 NET INCOME GREW 12 PERCENT FOR THE QUARTER, AND 11 PERCENT FOR THE NINE MONTHS.
 NET INCOME PER COMMON SHARE ROSE 11 PERCENT FOR BOTH PERIODS.
 SYSTEMWIDE SALES GREW 10 PERCENT FOR THE NINE MONTHS, AND 11 PERCENT FOR THE QUARTER.
 KEY HIGHLIGHTS Nine Months Ended September 30
 (Dollars in millions, except Percent
 per common share amounts) 1992 1991 $ Increase
 Systemwide sales $16,173.8 $14,758.6 1,415.2 10
 Total revenues $ 5,304.9 $ 4,965.2 339.7 7
 Operating income $ 1,405.9 $ 1,268.3 137.6 11
 Net income $ 730.7 $ 659.2 71.5 11
 Net income per common share $ 1.99 $ 1.80 .19 11
 Third Quarter Ended September 30
 Percent
 1992 1991 $ Increase
 Systemwide sales $ 5,871.3 $ 5,274.2 597.1 11
 Total revenues $ 1,912.5 $ 1,736.6 175.9 10
 Operating income $ 534.7 $ 475.0 59.7 13
 Net income $ 289.2 $ 258.7 30.5 12
 Net income per common share $ .79 $ .71 .08 11
 SUMMARY COMMENTARY
 On a worldwide basis, McDonald's business continued to show improvement, and strong operating results made this another record quarter. 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 improved operating results and stronger foreign currencies, despite weak economies in several major markets.
 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, while weaker foreign currencies impacted the first quarter.
 A total of 334 restaurants were added in 1992 (350 in 1991), including 247 outside of the U.S. (242 in 1991). An additional 307 restaurants were under construction at quarter-end (261 in 1991), including 208 outside of the U.S. (181 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.
 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 third quarter, these margins were 20.1 percent in 1992, and 19.6 percent in 1991.
 Franchised restaurant margins were 82.7 percent of applicable revenues for 1992, compared to 82.9 percent one year ago. For the third quarter, these margins were 83.4 percent in 1992, and 83.6 percent in 1991.
 The increases in general, administrative and selling expenses were due to higher employee costs associated with expansion, partially offset by a reduction in U.S. marketing costs associated with the value program.
 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.
 Nine Months Third Quarter
 Ended September 30 Ended September 30
 1992 1991 1992 1991
 (In millions of dollars)
 Gains on sales of
 restaurant businesses $(35.1) $ (52.6) $(13.8) $(16.3)
 Equity in earnings of
 unconsolidated affiliates (21.9) (47.3) (12.9) (11.0)
 Other (5.6) (9.2) 5.0 (7.4)
 Other operating (income)
 expense--net $(62.6) $(109.1) $(21.7) $(34.7)
 The increases in operating income reflected better results from franchised restaurants, stronger company-operated restaurant margins, stronger foreign currencies, and a lower rate of increase in general, administrative and selling expenses, partially offset by lower income from other operating transactions.
 The decrease in interest expense for the nine months was due to lower average debt balances and lower average interest rates, offset by a reduction in capitalized interest and stronger foreign currencies. The impact of stronger foreign currencies was more significant in the third quarter, and caused an increase in interest expense.
 Nonoperating income (expense)--net included a $12.1 million charge related to the early redemption of $184 million of 9.75 percent U.S. Dollar debt recorded in the first quarter.
 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 5 percent for both periods. Sales and transaction counts were positively affected by our value program; by the Olympic promotion; and by marketing and promotional programs, such as Batman, the Extra-Value Meal NBA Trading Card program and value-priced promotions. Gains from these efforts were partially offset by the economy and competition.
 U.S. revenues were flat for the nine months and increased 1 percent for the quarter, primarily as a result of the licensing of certain company-operated restaurant businesses to franchisees. Licensing these restaurants improves profits for the company and the entire system, but reduces consolidated revenues for the company.
 U.S. operating income increased 2 percent for the nine months; for the quarter, operating income was flat. Offsetting the favorable impact of stronger sales were significant reductions in income from other operating transactions. The gain on the sale of real estate by a U.S. affiliate was recorded in the 1991 second quarter.
 OPERATING RESULTS OUTSIDE OF THE U.S.
 Sales outside of the U.S. rose 18 percent for the nine months and 23 percent for the quarter due to increased market penetration, stronger foreign currencies, and higher sales at existing restaurants. Many markets -- specifically Australia, France, Germany, Hong Kong, Netherlands, Philippines, Singapore, Spain, Sweden and Switzerland -- achieved excellent sales gains. Economies remained weak in Canada, England and Japan; however, Canada and England showed improvement in sales and operating income in the third quarter.
 Revenues outside of the U.S. increased 16 percent for the nine months, and 21 percent for the quarter; both periods benefited from stronger foreign currencies.
 Operating income outside of the U.S. grew 24 percent for the nine months and 30 percent for the quarter. These results reflected expansion, strong operating performance, and stronger foreign currencies, despite weak economies in several major markets. The favorable settlement of a sales tax case in Brazil was recorded in other operating (income) expense--net in the 1992 second quarter.
 If exchange rates had remained at 1991 levels, operating results would have been as follows:
 Nine Months Ended September 30
 (Dollars in millions) Reported Adjusted
 $ Percent $ Percent
 Systemwide sales $16,173.8 10 $15,970.4 8
 Operating income $ 1,405.9 11 $ 1,386.1 9
 Net income $ 730.7 11 $ 724.9 10
 Third Quarter Ended September 30
 Reported Adjusted
 $ Percent $ Percent
 Systemwide sales $ 5,871.3 11 $ 5,687.7 8
 Operating income $ 534.7 13 $ 513.9 8
 Net income $ 289.2 12 $ 281.1 9
 McDONALD'S CORPORATION
 Financial Information
 (In millions of dollars)
 Nine Months Ended September 30
 Increase
 (Decrease)
 1992 1991 $ Percent
 SYSTEMWIDE SALES
 U.S.
 Operated by franchisees $ 7,843.9 $ 7,362.9 481.0 7
 Operated by the Company 1,757.1 1,825.8 (68.7) (4)
 Operated by affiliates 204.4 175.4 29.0 17
 Total 9,805.4 9,364.1 441.3 5
 Outside of the U.S.
 Operated by franchisees 2,827.8 2,229.4 598.4 27
 Operated by the Company 2,050.5 1,821.0 229.5 13
 Operated by affiliates 1,490.1 1,344.1 146.0 11
 6,368.4 5,394.5 973.9 18
 Total $16,173.8 $14,758.6 1,415.2 10
 By Type
 Operated by franchisees $10,671.7 $ 9,592.3 1,079.4 11
 Operated by the Company 3,807.6 3,646.8 160.8 4
 Operated by affiliates 1,694.5 1,519.5 175.0 12
 Total $16,173.8 $14,758.6 1,415.2 10
 TOTAL REVENUES
 U.S. $ 2,791.5 $ 2,793.0 (1.5) -
 Outside of the U.S. 2,513.4 2,172.2 341.2 16
 Total $ 5,304.9 $ 4,965.2 339.7 7
 OPERATING INCOME
 U.S. $ 790.7 $ 773.9 16.8 2
 Outside of the U.S. 615.2 494.4 120.8 24
 Total $ 1,405.9 $ 1,268.3 137.6 11
 PERCENT CONTRIBUTION TO
 CONSOLIDATED MARGINS Company-operated Franchised
 1992 1991 1992 1991
 U.S. 45 48 69 74
 Outside of the U.S. 55 52 31 26
 Total 100 100 100 100
 McDONALD'S CORPORATION
 Restaurant Information
 At September 30
 Increase
 (Decrease)
 1992 1991 Number Percent
 U.S.
 Operated by franchisees 7,267 7,056 211 3
 Operated by the Company 1,402 1,463 (61) (4)
 Operated by affiliates 182 165 17 10
 Total 8,851 8,684 167 2
 Outside of the U.S.
 Operated by franchisees 1,734 1,478 256 17
 Operated by the Company 1,108 1,068 40 4
 Operated by affiliates 1,059 923 136 15
 3,901 3,469 432 12
 Total 12,752 12,153 599 5
 By Type
 Operated by franchisees 9,001 8,534 467 5
 Operated by the Company 2,510 2,531 (21) (1)
 Operated by affiliates 1,241 1,088 153 14
 Total 12,752 12,153 599 5
 Restaurants in Major Markets Outside of the U.S.
 Japan 908 826
 Canada 651 633
 England 411 385
 Germany 406 364
 Australia 320 285
 France 229 182
 Other 976 794
 Total 3,901 3,469
 McDONALD'S CORPORATION
 Condensed Consolidated Statement of Income
 (Dollars and shares in millions, except per common share amounts)
 Nine Months Ended September 30
 Increase
 (Decrease)
 1992 1991 $ Percent
 SYSTEMWIDE SALES $16,173.8 $14,758.6 1,415.2 10
 Revenues
 Sales by Company-
 operated restaurants $ 3,807.6 $ 3,646.8 160.8 4
 Revenues from
 franchised restaurants 1,497.3 1,318.4 178.9 14
 TOTAL REVENUES 5,304.9 4,965.2 339.7 7
 Operating costs and expenses
 Company-operated restaurants 3,082.1 2,994.9 87.2 3
 Franchised restaurants 258.5 225.2 33.3 15
 General, administrative
 and selling expenses 621.0 585.9 35.1 6
 Other operating (income)
 expense--net (62.6) (109.1) 46.5 (43)
 Total operating
 costs and expenses 3,899.0 3,696.9 202.1 5
 OPERATING INCOME 1,405.9 1,268.3 137.6 11
 Interest expense 287.2 292.7 (5.5) (2)
 Nonoperating income
 (expense)--net (14.9) 20.9 (35.8) N/M
 Income before provision
 for income taxes 1,103.8 996.5 107.3 11
 Provision for income taxes 373.1 337.3 35.8 11
 NET INCOME $ 730.7 $ 659.2 71.5 11
 NET INCOME PER COMMON
 SHARE(A) $1.99 $ 1.80 .19 11
 Weighted average common
 shares outstanding 362.9 358.1
 (A) -- Computed using net income reduced by preferred stock dividends of $9.8 million (net of tax) and $13.9 million for 1992 and 1991.
 N/M - Not Meaningful
 McDONALD'S CORPORATION
 Condensed Consolidated Statement of Income
 (Dollars and shares in millions, except per common share amounts)
 Third Quarter Ended September 30
 Increase
 (Decrease)
 1992 1991 $ Percent
 SYSTEMWIDE SALES $ 5,871.3 $ 5,274.2 597.1 11
 Revenues
 Sales by Company-
 operated restaurants $ 1,366.9 $ 1,262.4 104.5 8
 Revenues from
 franchised restaurants 545.6 474.2 71.4 15
 TOTAL REVENUES 1,912.5 1,736.6 175.9 10
 Operating costs and expenses
 Company-operated restaurants 1,092.0 1,015.1 76.9 8
 Franchised restaurants 90.4 78.0 12.4 16
 General, administrative
 and selling expenses 217.1 203.2 13.9 7
 Other operating (income)
 expense--net (21.7) (34.7) 13.0 (37)
 Total operating
 costs and expenses 1,377.8 1,261.6 116.2 9
 OPERATING INCOME 534.7 475.0 59.7 13
 Interest expense 97.0 94.4 2.6 3
 Nonoperating income
 (expense)--net (.8) 9.0 (9.8) N/M
 Income before provision
 for income taxes 436.9 389.6 47.3 12
 Provision for income taxes 147.7 130.9 16.8 13
 NET INCOME $ 289.2 $ 258.7 30.5 12
 NET INCOME PER COMMON
 SHARE(A) $ .79 $ .71 .08 11
 Weighted average common
 shares outstanding 363.6 357.4
 (A) -- Computed using net income reduced by preferred stock dividends of $3.0 million (net of tax) and $5.2 million for 1992 and 1991, respectively. N/M - Not Meaningful
 -0- 10/22/92
 /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 -- CL029 -- 3765 10/22/92 15:18 EDT
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