McDonald's Reports Growth In Fourth Quarter And Full Year 2012

        McDonald's Reports Growth In Fourth Quarter And Full Year 2012

PR Newswire

OAK BROOK, Ill., Jan. 23, 2013

OAK BROOK, Ill., Jan. 23, 2013 /PRNewswire/ --McDonald's Corporation today
announced results for the fourth quarter and year ended December 31, 2012,
reflecting higher revenues, operating income and earnings per share compared
with the prior year.

"Throughout 2012 we concentrated our efforts behind the global priorities that
represent our greatest opportunities under the Plan to Win — optimizing our
menu, modernizing the customer experience and broadening accessibility to our
Brand," said McDonald's Chief Executive Officer Don Thompson. "McDonald's
continued to grow by remaining focused on what matters most to our customers,
although our results reflect the impact of the challenging global operating,
economic and competitive environment. Our overall performance is a testament
to the underlying strength of our business and our dedicated System of
franchisees, suppliers and employees who continue to drive toward our mission
to become our customers' favorite place and way to eat and drink."

Full year 2012 highlights included:

  oGlobal comparable sales increased 3.1%, with the U.S. up 3.3%, Europe up
    2.4% and Asia/Pacific, Middle East and Africa (APMEA) up 1.4%
  oConsolidated revenues up 2% (5% in constant currencies)
  oConsolidated operating income increase of 1% (4% in constant currencies),
    with the U.S. up 2%, Europe down 1% (up 6% in constant currencies) and
    APMEA up 3% (3% in constant currencies)
  oDiluted earnings per share of $5.36, up 2% (5% in constant currencies)
  oReturned $5.5 billion to shareholders through dividends and share
    repurchases

Fourth Quarter highlights included:

  oGlobal comparable sales increased 0.1%
  oConsolidated revenues increased 2% (2% in constant currencies)
  oConsolidated operating income increase of 4% (4% in constant currencies)
  oDiluted earnings per share of $1.38, up 4% (5% in constant currencies)

McDonald's U.S. generated positive comparable sales and operating income
results for the year despite ongoing economic and competitive pressures.
Fourth quarter comparable sales increased 0.3% and operating income was
relatively flat against strong prior year results. During the quarter, the
U.S. focused on enhancing its value leadership position by balancing strong
everyday value messaging with affordable and compelling premium menu options.

For the year, Europe delivered comparable sales and constant currency
operating income growth despite ongoing economic uncertainty throughout the
segment. During the fourth quarter, Europe's operating income rose 5% (up 7%
in constant currencies) while comparable sales were down 0.6% due to negative
comparable guest counts and strong prior year performance. The U.K. and Russia
were key contributors to the segment's operating income performance for both
periods. Emphasis on unique promotional food events, expanded value offerings
and restaurant reimaging continued to provide an appealing customer experience
and supported the segment's results.

For the year, APMEA generated positive comparable sales and operating income
growth. APMEA's fourth quarter comparable sales declined 1.7% and operating
income was flat (down 1% in constant currencies) against strong prior year
results. Positive quarterly sales and operating results in Australia were more
than offset by ongoing weakness in Japan and other markets. Throughout APMEA,
consumers continued to respond to the segment's compelling value platforms,
great tasting premium menu selections and relevant convenience.

Don Thompson continued, "As we begin the new year, our average annual
long-term targets in constant currency remain intact: Systemwide sales growth
of 3% to 5%, operating income growth of 6% to 7%, and return on incremental
invested capital in the high teens. We believe these targets remain realistic
and sustainable for a company of our size and maturity. In 2013, we plan to
invest about $3.2 billion of capital to open between 1,500 - 1,600 new
McDonald's restaurants and to reinvest in our existing locations, including
reimaging more than 1,600 locations worldwide. We are confident that now is an
opportune time to invest in our restaurant portfolio in ways that will yield
value for all stakeholders in the future."

Don Thompson concluded, "Moving forward, we remain focused on seizing the
long-term opportunities in the global marketplace by leveraging our
competitive advantages. We have a brand advantage in convenience, menu variety
and value, a resilient business model, and the experience and alignment
throughout the McDonald's System to navigate the current environment. For the
near-term we expect top and bottom-line growth to remain pressured, with
January's global comparable salesexpected to benegative."

KEY HIGHLIGHTS - CONSOLIDATED

Dollars in millions, except per share data
               Quarters Ended December 31,               Years Ended December 31,
                                            % Inc                                  %       % Inc
               2012        2011        %    Excluding    2012         2011         Inc/    Excluding
                                       Inc  Currency                               (Dec)   Currency
                                            Translation                                    Translation
Revenues       $ 6,952.1   $ 6,822.7   2    2            $ 27,567.0   $ 27,006.0   2       5
Operating      2,197.8     2,120.0     4    4            8,604.6      8,529.7      1       4
income
Net income     1,396.1     1,376.6     1    2            5,464.8      5,503.1      (1)     3
Earnings per   1.38        1.33        4    5            5.36         5.27         2       5
share-diluted*

  Foreign currency translation had a negative impact of $0.01 and $0.17 on
* diluted earnings per share for the quarter and year ended December 31, 2012,
  respectively.

THE FOLLOWING DEFINITIONS APPLY TO THESE TERMS AS USED THROUGHOUT THIS RELEASE

Comparable sales represent sales at all restaurants and comparable guest
counts represent the number of transactions at all restaurants, whether
operated by the Company or by franchisees, in operation at least thirteen
months including those temporarily closed. Some of the reasons restaurants may
be temporarily closed include reimaging or remodeling, rebuilding, road
construction and natural disasters. Comparable sales exclude the impact of
currency translation. Comparable sales are driven by changes in guest counts
and average check, which is affected by changes in pricing and product mix.
Management reviews the increase or decrease in comparable sales and comparable
guest counts compared with the same period in the prior year to assess
business trends. The number of weekdays and weekend days, referred to as the
calendar shift/trading day adjustment, can impact comparable sales and guest
counts. In addition, the timing of holidays can impact comparable sales and
guest counts.

Information in constant currency is calculated by translating current year
results at prior year average exchange rates. Management reviews and analyzes
business results excluding the effect of foreign currency translation and
bases incentive compensation plans on these results because they believe this
better represents the Company's underlying business trends.

RELATED COMMUNICATIONS

This press release should be read in conjunction with Exhibit 99.2 in the
Company's Form 8-K filing for supplemental information related to the
Company's results for the quarter and year ended December 31, 2012.

McDonald's Corporation will broadcast its investor conference call live over
the Internet at 10:00 a.m. Central Time on January 23, 2013. A link to the
live webcast will be available at www.investor.mcdonalds.com. There will also
be an archived webcast and podcast available for a limited time.

The Company plans to release January 2013 sales information on February 8,
2013.

FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements, which reflect
management's expectations regarding future events and operating performance
and speak only as of the date hereof. These forward-looking statements involve
a number of risks and uncertainties. The factors that could cause actual
results to differ materially from our expectations are detailed in the
Company's filings with the Securities and Exchange Commission, such as its
annual and quarterly reports and current reports on Form 8-K.



McDONALD'S CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME
Dollars and shares in millions, except                          Inc/ (Dec)
per share data
Quarters Ended December 31,             2012        2011        $        %
Revenues
Sales by Company-operated restaurants   $ 4,658.4   $ 4,587.2   71.2     2
Revenues from franchised restaurants    2,293.7     2,235.5     58.2     3
TOTAL REVENUES                          6,952.1     6,822.7     129.4    2
Operating costs and expenses
Company-operated restaurant expenses    3,831.1     3,731.1     100.0    3
Franchised restaurants—occupancy        392.7       378.0       14.7     4
expenses
Selling, general & administrative       624.5       661.2       (36.7)   (6)
expenses
Impairment and other charges (credits), 1.8         0.3         1.5      n/m
net
Other operating (income) expense, net   (95.8)      (67.9)      (27.9)   (41)
Total operating costs and expenses      4,754.3     4,702.7     51.6     1
OPERATING INCOME                        2,197.8     2,120.0     77.8     4
Interest expense                        129.6       126.9       2.7      2
Nonoperating (income) expense, net      0.2         9.4         (9.2)    (98)
Income before provision for income      2,068.0     1,983.7     84.3     4
taxes
Provision for income taxes              671.9       607.1       64.8     11
NET INCOME                              $ 1,396.1   $ 1,376.6   19.5     1
EARNINGS PER SHARE-DILUTED              $ 1.38      $ 1.33      0.05     4
Weighted average shares                 1,010.7     1,034.7     (24.0)   (2)
outstanding-diluted

n/m Not meaningful

McDONALD'S CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME
Dollars and shares in millions,                                 Inc/ (Dec)
except per share data
Years Ended December 31,              2012         2011         $        %
Revenues
Sales by Company-operated restaurants $ 18,602.5   $ 18,292.8   309.7    2
Revenues from franchised restaurants  8,964.5      8,713.2      251.3    3
TOTAL REVENUES                        27,567.0     27,006.0     561.0    2
Operating costs and expenses
Company-operated restaurant expenses  15,223.7     14,837.9     385.8    3
Franchised restaurants-occupancy      1,527.0      1,481.5      45.5     3
expenses
Selling, general & administrative     2,455.2      2,393.7      61.5     3
expenses
Impairment and other charges          8.0          (3.9)        11.9     n/m
(credits), net
Other operating (income) expense, net (251.5)      (232.9)      (18.6)   (8)
Total operating costs and expenses    18,962.4     18,476.3     486.1    3
OPERATING INCOME                      8,604.6      8,529.7      74.9     1
Interest expense                      516.6        492.8        23.8     5
Nonoperating (income) expense, net    9.0          24.7         (15.7)   (64)
Income before provision for income    8,079.0      8,012.2      66.8     1
taxes
Provision for income taxes            2,614.2      2,509.1      105.1    4
NET INCOME                            $ 5,464.8    $ 5,503.1    (38.3)   (1)
EARNINGS PER SHARE-DILUTED            $ 5.36       $ 5.27       0.09     2
Weighted average shares               1,020.2      1,044.9      (24.7)   (2)
outstanding-diluted

n/m Not meaningful



SOURCE McDonald's Corporation

Website: http://www.mcdonalds.com
Contact: Investors: Kathy Martin, 630-623-7833, Media: Heidi Barker,
630-623-3791
 
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