<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-5231 ---------- ----------
------
McDONALD'S CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 36-2361282
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
McDonald's Plaza, Oak Brook, Illinois 60521
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (708) 575-3000
--------------------------------------------------------------
Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes X No
--- ---
353,869,989
---------------------------------
(Number of shares of common stock
outstanding as of March 31, 1994)
<PAGE>
<PAGE> 2
McDONALD'S CORPORATION
----------------------
INDEX
-----
Page Reference
Part I. Financial Information
Item 1 - Financial Statements
Condensed consolidated balance sheet,
March 31, 1994 (unaudited) and
December 31, 1993 3
Condensed consolidated statement of
income (unaudited), three months ended
March 31, 1994 and 1993 4
Condensed consolidated statement of
cash flows (unaudited), three months
ended March 31, 1994 and 1993 5
Financial comments (unaudited) 6
Item 2 - Management's Discussion and
Analysis of Financial Condition
and Results of Operations 7
Part II. Other Information
Item 6 - Exhibits and Reports on Form 8-K
(a)Exhibits
The exhibits listed in the
accompanying Exhibit Index are
filed as part of this report 12
(b)Reports on Form 8-K 15
Signature 16
Exhibit Index 17
<PAGE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements
-----------------------------
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEET
<CAPTION>
(unaudited)
(In millions of dollars) March 31, 1994 December 31, 1993
---------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and equivalents $ 168.1 $ 185.8
Accounts receivable 268.8 287.0
Notes receivable 28.4 27.6
Inventories, at cost, not in excess
of market 42.0 43.5
Prepaid expenses and other current
assets 112.3 118.9
-------------------------------------------------------------------------
TOTAL CURRENT ASSETS 619.6 662.8
-------------------------------------------------------------------------
OTHER ASSETS AND DEFERRED CHARGES 876.0 875.3
-------------------------------------------------------------------------
PROPERTY AND EQUIPMENT
Property and equipment, at cost 13,730.6 13,459.0
Accumulated depreciation and
amortization (3,485.6) (3,377.6)
-------------------------------------------------------------------------
NET PROPERTY AND EQUIPMENT 10,245.0 10,081.4
-------------------------------------------------------------------------
INTANGIBLE ASSETS-NET 442.5 415.7
-------------------------------------------------------------------------
TOTAL ASSETS $12,183.1 $12,035.2
=========================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 99.5 $ 193.3
Accounts payable 321.6 395.7
Income taxes 105.3 56.0
Accrued interest 119.4 132.9
Other accrued liabilities 280.6 294.1
Current maturities of long-term debt 29.4 30.0
-------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 955.8 1,102.0
-------------------------------------------------------------------------
LONG-TERM DEBT 3,560.0 3,489.4
OTHER LONG-TERM LIABILITIES AND
MINORITY INTERESTS 380.4 334.4
DEFERRED INCOME TAXES 824.1 835.3
SHAREHOLDERS' EQUITY
Preferred stock, no par value;
authorized - 165.0 million shares;
issued - 5.7 million 676.5 677.3 <PAGE>
Common stock, no par value;
authorized - 1.25 billion shares;
issued - 415.2 million 46.2 46.2
Additional paid-in capital 317.0 302.8
Guarantee of ESOP notes (253.3) (253.6)
Retained earnings 7,796.4 7,612.6
Foreign currency translation
adjustment (180.2) (192.2)
-------------------------------------------------------------------------
8,402.6 8,193.1
-------------------------------------------------------------------------
Common stock in treasury, at cost;
61.3 and 61.5 million shares (1,939.8) (1,919.0)
-------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 6,462.8 6,274.1
-------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $12,183.1 $12,035.2
=========================================================================
See accompanying Financial comments.
</TABLE>
<PAGE>
<PAGE> 4
<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
<CAPTION>
(In millions of dollars, except per Quarters ended March 31
common share data) 1994 1993
-----------------------------------------------------------------------------
<S> <C> <C>
REVENUES
Sales by Company-operated restaurants $1,244.7 $1,153.3
Revenues from franchised restaurants 551.3 500.8
-----------------------------------------------------------------------------
TOTAL REVENUES 1,796.0 1,654.1
-----------------------------------------------------------------------------
OPERATING COSTS AND EXPENSES
Company-operated restaurants 1,017.4 952.9
Franchised restaurants-occupancy costs 100.4 90.8
General, administrative and selling expenses 239.5 217.8
Other operating (income) expense-net (20.4) (18.8)
-----------------------------------------------------------------------------
TOTAL OPERATING COSTS AND EXPENSES 1,336.9 1,242.7
-----------------------------------------------------------------------------
OPERATING INCOME 459.1 411.4
-----------------------------------------------------------------------------
Interest expense 71.8 79.3
Nonoperating income (expense)-net (9.9) 1.2
-----------------------------------------------------------------------------
INCOME BEFORE PROVISION FOR INCOME TAXES 377.4 333.3
-----------------------------------------------------------------------------
Provision for income taxes 134.0 115.0
-----------------------------------------------------------------------------
NET INCOME $ 243.4 $ 218.3
=============================================================================
NET INCOME PER COMMON SHARE $ .65 $ .57
-----------------------------------------------------------------------------
DIVIDENDS PER COMMON SHARE $ .1075 $ .10
-----------------------------------------------------------------------------
See accompanying Financial comments.
</TABLE>
<PAGE>
<PAGE> 5
<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<CAPTION>
Quarters ended March 31
(In millions of dollars) 1994 1993
------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $243.4 $218.3
Adjustments to reconcile to cash provided by
operations
Depreciation and amortization 147.9 136.6
Changes in operating working capital items (13.3) (59.0)
Other (1.2) (4.6)
------------------------------------------------------------------------------
CASH PROVIDED BY OPERATIONS 376.8 291.3
------------------------------------------------------------------------------
INVESTING ACTIVITIES
Property and equipment expenditures (260.2) (212.1)
Sales of restaurant businesses 29.4 17.9
Purchases of restaurant businesses (27.8) (6.4)
Property sales 6.4 21.2
Other (4.7) (7.7)
------------------------------------------------------------------------------
CASH USED FOR INVESTING ACTIVITIES (256.9) (187.1)
------------------------------------------------------------------------------
FINANCING ACTIVITIES
Notes payable and commercial paper net borrowings
supported by line of credit agreements 115.8 277.4
Other long-term financing issuances 94.8 206.4
Other long-term financing repayments (284.0) (462.3)
Treasury stock purchases (27.9) (256.3)
Common and preferred stock dividends (50.8) (48.8)
Other 14.5 20.5
------------------------------------------------------------------------------
CASH USED FOR FINANCING ACTIVITIES (137.6) (263.1)
------------------------------------------------------------------------------
CASH AND EQUIVALENTS DECREASE (17.7) (158.9)
Cash and equivalents at beginning of period 185.8 436.5
------------------------------------------------------------------------------
CASH AND EQUIVALENTS AT END OF PERIOD $168.1 $277.6
==============================================================================
See accompanying Financial comments.
</TABLE>
<PAGE>
<PAGE> 6
FINANCIAL COMMENTS (UNAUDITED)
BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements should be
read in conjunction with the consolidated financial statements in the
Company's 1993 Annual Report to Shareholders. In the opinion of the
Company, all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation have been included.
The results of operations of restaurant businesses purchased and
sold were not material to the condensed consolidated financial
statements for periods prior to purchase and sale.
NET INCOME PER COMMON SHARE
Net income per common share was computed using net income, reduced by
preferred stock cash dividends (net of tax) of $11.8 million for 1994
and for 1993, divided by the weighted average shares of common stock
outstanding: 353.8 and 361.5 million for the quarters ended March 31,
1994 and 1993, respectively. The effect of potentially dilutive
securities was not material.
<PAGE>
<PAGE> 7
Item 2. Management's Discussion And Analysis Of Financial Condition
--------------------------------------------------------------------
And Results Of Operations
-------------------------
<TABLE>
INCREASES (DECREASES) IN OPERATING RESULTS OVER 1993
<CAPTION>
(Dollars in millions, except
per common share data) Quarter Ended March 31
----------------------------------------------------------------------
<S> <C> <C>
SYSTEMWIDE SALES $474.1 9%
----------------------------------------------------------------------
REVENUES
Sales by Company-operated restaurants 91.4 8
Revenues from franchised restaurants 50.5 10
----------------------------------------------------------------------
TOTAL REVENUES 141.9 9
----------------------------------------------------------------------
OPERATING COSTS AND EXPENSES
Company-operated restaurants 64.5 7
Franchised restaurants-occupancy costs 9.6 11
General, administrative and selling expenses 21.7 10
Other operating (income) expense-net (1.6) 9
----------------------------------------------------------------------
TOTAL OPERATING COSTS AND EXPENSES 94.2 8
----------------------------------------------------------------------
OPERATING INCOME 47.7 12
----------------------------------------------------------------------
Interest expense (7.5) (10)
Nonoperating income
(expense)-net (11.1) NM
----------------------------------------------------------------------
INCOME BEFORE PROVISION FOR INCOME TAXES 44.1 13
----------------------------------------------------------------------
Provision for income taxes 19.0 17
----------------------------------------------------------------------
NET INCOME $25.1 12%
======================================================================
NET INCOME PER COMMON SHARE $ .08 14%
----------------------------------------------------------------------
NM - Not Meaningful
</TABLE>
<PAGE>
<PAGE> 8
CONSOLIDATED OPERATING RESULTS
Net income and net income per common share increased 12 and 14%,
respectively, for the quarter. The 2 percentage point spread between
net income and net income per common share reflected the impact of
share repurchase.
Systemwide sales represent sales by Company-operated, franchised
and affiliated restaurants. The increase was due to expansion and
higher sales at existing restaurants worldwide, affected in part by
severe weather conditions worldwide. The increase in revenues
reflected strong worldwide operating results.
A total of 125 restaurants were added in 1994 (91 in 1993),
including 40 in the U.S. (26 in 1993) and 85 outside of the U.S. (65
in 1993). An additional 235 restaurants were under construction at
quarter-end (209 in 1993), including 107 in the U.S. (90 in 1993) and
128 outside of the U.S. (119 in 1993). In addition, over 200
satellites were operating worldwide at quarter-end. These sites
leverage the infrastructure of existing restaurants by using their
storage capability and inventory or by drawing on their management
talent and labor pool. Satellite locations were not included in
Systemwide restaurants.
Franchised restaurant margins comprised about two-thirds of the
combined operating margins. Consolidated franchised margins were
81.8% of applicable revenues for the quarter, compared to 81.9% one
year ago.
Consolidated Company-operated margins improved to 18.3% of sales
for the quarter from 17.4% one year ago. All costs declined as a
percent of sales.
The increase in general, administrative and selling expenses was
due primarily to higher employee costs associated with expansion and
key priorities.
Other operating transactions relate to franchising and the food
business such as gains on sales of restaurant businesses, equity in
earnings of unconsolidated affiliates and other items.
<PAGE>
<PAGE> 9
-------------------------------------------------------------------
Quarters Ended March 31
(In millions of dollars) 1994 1993
-------------------------------------------------------------------
Gains on sales of restaurant businesses $(17.4) $(10.1)
Equity in earnings of unconsolidated affiliates (10.9) (6.7)
Other 7.9 (2.0)
-------------------------------------------------------------------
Other operating (income) expense-net $(20.4) $(18.8)
===================================================================
The other category above included losses related to property
dispositions in 1994, compared to gains in 1993.
The increase in consolidated operating income primarily reflected
better results from combined operating margins, partially offset by
higher general, administrative and selling expenses and weaker foreign
currencies.
The decrease in interest expense was due primarily to lower
interest rates and weaker foreign currencies.
Nonoperating income (expense) was affected by greater translation
losses primarily from Latin American countries; higher dividends
associated with preferred interests in consolidated subsidiaries; and
lower interest income in 1994 as a portion of the proceeds from the
1992 preferred stock issuance, later used for share repurchase, was
invested during the first quarter of 1993.
The effective income tax rate increased to 35.5% in the first
quarter of 1994, compared to 35.4% for the year 1993 and 34.5% for the
first quarter of 1993. The changes were primarily as a result of the
new U.S. tax legislation enacted in the third quarter of 1993.
U.S. OPERATING RESULTS
U.S. sales and revenues grew 6% for the quarter due to expansion and
higher sales at existing restaurants. Sales were positively driven by
the emphasis on value and customer satisfaction in the form of Extra
Value Meals, Happy Meals and the three-tier value program; as well as
the NBA cup promotion highlighting large sandwiches.
U.S. operating income increased 5% for the quarter, as higher
combined operating margins were partially offset by higher general,
administrative and selling expenses. The improvement in U.S. Company-
operated margins was noteworthy, from 16.6% of sales in 1993 to 17.7%
in 1994.
<PAGE>
<PAGE> 10
OPERATING RESULTS OUTSIDE OF THE US.
Sales outside of the U.S. rose 14% for the quarter due to expansion
and higher sales at existing restaurants. If exchange rates had
remained at 1993 levels, the increase would have remained 14%. Many
markets delivered excellent sales on a local currency basis:
Argentina, Australia, Austria, Belgium, Brazil, Canada, Denmark,
England, Finland, Germany, Hungary, Ireland, Italy, Korea, Malaysia,
Netherlands, New Zealand, Norway, Panama, Philippines, Puerto Rico,
Scotland, Singapore, Spain, Sweden, Switzerland, Taiwan, Thailand and
Wales.
Pacific sales were strong with the exception of our joint venture
in Japan which continues to be affected by a weak economy. Although
many European economies showed weakness, McDonald's markets generally
performed well because of an emphasis on value. Latin American
economies have been weak, but our business there has been improving.
Business in Canada continued to improve, despite a weak economy.
Revenues outside of the U.S. increased 12% for the quarter,
constrained by weaker foreign currencies especially in Germany, Canada
and France. If exchange rates had remained at 1993 levels, the
increase would have been 14%.
Operating income outside of the U.S. grew 19% for the quarter,
reflecting expansion and higher combined operating margins, partially
offset by higher general, administrative and selling expenses and
weaker foreign currencies. If exchange rates had remained at 1993
levels, the increase would have been 22%.
IMPACT OF FOREIGN CURRENCIES ON REPORTED RESULTS
Local currency results were strong. However, weaker foreign
currencies continued to negatively impact consolidated operating
results throughout the first quarter of 1994. The Deutsche Mark, the
Canadian Dollar and the French Franc were primarily responsible for
the impact. Although the impact of the Japanese Yen was positive, the
benefit was more significant to sales than operating income since our
operations are managed through a joint venture and hence, not
consolidated. If exchange rates had remained at 1993 levels, the
reported results would have been as follows:
-------------------------------------------------------------
Quarter Ended March 31, 1994
(Dollars in millions) Reported Adjusted
-------------------------------------------------------------
Systemwide sales $5,709.2 9% $5,718.6 9%
Operating income 459.1 12 463.9 13
Net income 243.4 12 248.3 14
-------------------------------------------------------------
While changing foreign currencies impact reported results,
McDonald's lessens short-term cash exposures by primarily purchasing
goods and services in local currencies, financing in local currencies
and hedging foreign-denominated cash flows.
<PAGE>
<PAGE> 11
FINANCIAL POSITION
Cash provided by operations increased 29% in 1994, primarily due to
changes in operating working capital items. Together with other
sources of cash such as borrowings, cash provided by operations was
used primarily for capital expenditures, debt repayments, dividends
and share repurchase. U.S. capital expenditures increased 40% and
capital expenditures outside of the U.S. increased 11%.
In January, the Company announced its plan to purchase up to $1
billion of common stock within the next three years. The Company
purchased .5 million shares of common stock for $27.9 million during
the first quarter.
FIRST QUARTER HIGHLIGHTS
--------------------------------------------------------------------
(Dollars in millions, except Quarters ended March 31
per common share data) 1994 1993
--------------------------------------------------------------------
Systemwide sales $5,709.2 $5,235.1
--------------------------------------------------------------------
U.S. sales $3,346.4 $3,158.4
Operated by franchisees 2,684.9 2,545.6
Operated by the Company 575.3 543.0
Operated by affiliates 86.2 69.8
--------------------------------------------------------------------
Sales outside of the U.S. $2,362.8 $2,076.7
Operated by franchisees 1,108.1 954.6
Operated by the Company 669.4 610.3
Operated by affiliates 585.3 511.8
--------------------------------------------------------------------
Total revenues $1,796.0 $1,654.1
U.S. 933.0 881.0
Outside of the U.S. 863.0 773.1
--------------------------------------------------------------------
Operating income $ 459.1 $ 411.4
U.S. 239.8 227.8
Outside of the U.S. 219.3 183.6
--------------------------------------------------------------------
Systemwide restaurants 14,118 13,184
--------------------------------------------------------------------
U.S. restaurants 9,323 8,985
Operated by franchisees 7,628 7,406
Operated by the Company 1,458 1,381
Operated by affiliates 237 198
--------------------------------------------------------------------
Restaurants outside of the U.S. 4,795 4,199
Operated by franchisees 2,258 1,901
Operated by the Company 1,283 1,155
Operated by affiliates 1,254 1,143
--------------------------------------------------------------------
<PAGE>
<PAGE> 12
PART II
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------
(a) - Exhibits
--------------
(4) Instruments defining the rights of security holders,
including indentures (A):
(a) Debt Securities. Indenture dated as of March 1, 1987
incorporated herein by reference from Exhibit 4(a) of
Form S-3 Registration Statement, SEC file no. 33-12364.
(i) Supplemental Indenture No. 5 incorporated herein
by reference from Exhibit (4) of Form 8-K dated
January 23, 1989.
(ii) 9-3/4% Notes due 1999. Supplemental Indenture
No. 6 incorporated herein by reference from
Exhibit (4) of Form 8-K dated January 23, 1989.
(iii) Medium-Term Notes, Series B, due from nine
months to 30 years from Date of Issue.
Supplemental Indenture No. 12 incorporated
herein by reference from Exhibit (4) of Form 8-K
dated August 18, 1989 and Forms of Medium-Term
Notes, Series B, incorporated herein by
reference from Exhibit (4)(b) of Form 8-K dated
September 14, 1989.
(iv) 9-3/8% Notes due 1997. Form of Supplemental
Indenture No. 14 incorporated herein by
reference from Exhibit (4) of Form 10-K for the
year ended December 31, 1989.
(v) Medium-Term Notes, Series C, due from nine
months to 30 years from Date of Issue. Form of
Supplemental Indenture No. 15 incorporated
herein by reference from Exhibit 4(b) of
Form S-3 Registration Statement, SEC file
no. 33-34762 dated May 14, 1990.
(vi) Medium-Term Notes, Series C, due from nine
months/184 days to 30 years from Date of Issue.
Amended and restated Supplemental Indenture
No. 16 incorporated herein by reference from
Exhibit (4) of Form 10-Q for the period ended
March 31, 1991.
(vii) 8-7/8% Debentures due 2011. Supplemental
Indenture No. 17 incorporated herein by
reference from Exhibit (4) of Form 8-K dated
April 22, 1991.
<PAGE>
<PAGE> 13
(viii)Medium-Term Notes, Series D, due from nine
months/184 days to 60 years from Date of Issue.
Supplemental Indenture No. 18 incorporated
herein by reference from Exhibit 4(b) of
Form S-3 Registration Statement, SEC file
no. 33-42642 dated September 10, 1991.
(ix) 7-3/8% Notes due July 15, 2002. Form of
Supplemental Indenture No. 19 incorporated
herein by reference from Exhibit (4) of Form 8-K
dated July 10, 1992.
(x) 6-3/4% Notes due February 15, 2003. Form of
Supplemental Indenture No. 20 incorporated
herein by reference from Exhibit (4) of Form 8-K
dated March 1, 1993.
(xi) 7-3/8% Debentures due July 15, 2033. Form of
Supplemental Indenture No. 21 incorporated
herein by reference from Exhibit (4)(a)of Form
8-K dated July 15, 1993.
(b) Form of Deposit Agreement dated as of November 25, 1992
by and between McDonald's Corporation, First Chicago
Trust Company of New York, as Depositary, and the
Holders from time to time of the Depositary Receipts.
(c) Rights Agreement dated as of December 13, 1988 between
McDonald's Corporation and The First National Bank of
Chicago, incorporated herein by reference from Exhibit
1 of Form 8-K dated December 23, 1988.
(i) Amendment No. 1 to Rights Agreement incorporated
herein by reference from Exhibit 1 of Form 8-K
dated May 25, 1989.
(ii) Amendment No. 2 to Rights Agreement incorporated
herein by reference from Exhibit 1 of Form 8-K
dated July 25, 1990.
(d) Indenture and Supplemental Indenture No. 1 dated as of
September 8, 1989, between McDonald's Matching and
Deferred Stock Ownership Trust, McDonald's Corporation
and Pittsburgh National Bank in connection with SEC
Registration Statement Nos. 33-28684 and 33-28684-01,
incorporated herein by reference from Exhibit (4)(a) of
Form 8-K dated September 14, 1989.
(e) Form of Supplemental Indenture No. 2 dated as of April
1, 1991, supplemental to the Indenture between
McDonald's Matching and Deferred Stock Ownership Trust,
McDonald's Corporation and Pittsburgh National Bank in
connection with SEC Registration Statement Nos.
33-28684 and 33-28684-01, incorporated herein by
reference from Exhibit (4)(c) of Form 8-K dated
March 22, 1991.
<PAGE>
<PAGE> 14
(10) Material Contracts
(a) Material contract between McDonald's Corporation and
Joan B. Kroc, incorporated herein by reference from
Exhibit (10) of Form 10-K for the year ended
December 31, 1984.
(b) Director's Deferred Compensation Plan, incorporated
herein by reference from Exhibit (10)(b)of Form 10-K
for the year ended December 31, 1992*.
(c) Profit Sharing Program, as amended, McDonald's
Supplemental Employee Benefit Equalization Plan,
McDonald's Profit Sharing Program Equalization Plan and
McDonald's 1989 Equalization Plan, incorporated by
reference from Form 10-K/A dated May 4, 1993, Amendment
No. 1 to Form 10-K for the year ended December 31, 1992*.
(i) Amendment No. 1 to McDonald's 1989 Equalization
Plan, incorporated herein by reference from Form
10-Q for the period ended June 30, 1993.
(ii) Amendment No. 2 to McDonald's 1989 Equalization
Plan, incorporated herein by reference from
Exhibit (10)(c) of Form 10-K for the year ended
December 31, 1993.
(iii) Amendment No. 1 to McDonald's Supplemental
Employee Benefit Equalization Plan, incorporated
herein by reference from Exhibit (10)(c) of Form
10-K for the year ended December 31, 1993.
(iv) Amendment No. 2 to McDonald's Supplemental
Employee Equalization Plan, incorporated herein by
reference from Exhibit (10)(c) of Form 10-K for
the year ended December 31, 1993.
(v) Amendment No. 5 to the Profit Sharing Program, as
amended, incorporated herein by reference from
Exhibit (10)(c) of Form 10-K for the year ended
December 31, 1993.
(vi) Amendment No. 6 to the Profit Sharing Program, as
amended, incorporated herein by reference from
Exhibit (10)(c) of Form 10-K for the year ended
December 31, 1993.
(d) 1975 Stock Ownership Option Plan, incorporated herein
by reference from Exhibit (10)(d) of Form 10-K for the
year ended December 31, 1992*.
(e) Stock Sharing Plan, incorporated herein by reference
from Exhibit (10)(e) of Form 10-K for the year ended
December 31, 1992*.
<PAGE>
<PAGE> 15
(f) 1992 Stock Ownership Incentive Plan, incorporated
herein by reference from exhibit pages 20-34 of
McDonald's 1992 Proxy Statement and Notice of 1992
Annual Meeting of Shareholders dated April 10, 1992*.
(g) McDonald's Corporation Deferred Incentive Plan,
incorporated herein by reference from Exhibit(10) of
Form 10-Q for the period ended September 30, 1993*.
(11) Statement re: Computation of per share earnings.
(12) Statement re: Computation of ratios.
--------------------
* Denotes compensatory plan.
(A) Other instruments defining the rights of holders of long-term
debt of the registrant and all of its subsidiaries for which
consolidated financial statements are required to be filed and
which are not required to be registered with the Securities and
Exchange Commission, are not included herein as the securities
authorized under these instruments, individually, do not exceed
10% of the total assets of the registrant and its subsidiaries on
a consolidated basis. An agreement to furnish a copy of any such
instruments to the Securities and Exchange Commission upon
request has been filed with the Commission.
(b) Reports on Form 8-K
The following report on Form 8-K was filed for the last quarter
covered by this report, and subsequently up to May 10, 1994.
Financial Statements
Date of Report Item Number required to be filed
-------------- ----------- --------------------
January 18, 1994 Item 7 No
<PAGE>
<PAGE> 16
Signature
-----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
McDONALD'S CORPORATION
(Registrant)
By /s/ Jack M. Greenberg
-----------------
(Signature)
Jack M. Greenberg
Vice Chairman,
Chief Financial Officer
May 10, 1994
----------------
(Date)
<PAGE>
<PAGE> 17
EXHIBIT INDEX
The following Exhibits are filed as part of Form 10-Q for the quarter
ended March 31, 1994.
Exhibit
Number Description of Document
------- -----------------------
11 Statement re: Computation of Per Share Earnings
12 Statement re: Computation of Ratios
<PAGE>
<TABLE>
Exhibit 11
McDONALD'S CORPORATION
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(Dollars and shares in millions, except per common share data)
<CAPTION> Quarters Ended March 31
1994 1993
---- ----
<S> <C> <C>
Net Income $243.4 $218.3
Preferred stock dividends (net of tax) (11.8) (11.8)
------- -------
Net income available after preferred stock dividends (A) 231.6 206.5
Common stock dividends on assumed conversion of preferred stock .3 .3
------- -------
Net income available to common shareholders $231.9 $206.8
======= =======
Weighted average number of common shares outstanding during the period (A) 353.8 361.5
Additional shares related to potentially dilutive securities 10.9 10.8
------- -------
Adjusted weighted average common shares 364.7 372.3
======= =======
Fully diluted net income per common share $ .64 $ .56
------- -------
---------------------
NOTES:
(A) Refer to Condensed consolidated statement of income on page 4 and to Financial comments -
Net income per common share on page 6 of this report.
</TABLE>
<PAGE>
<TABLE> Exhibit 12
McDONALD'S CORPORATION
STATEMENT RE: COMPUTATION OF RATIOS
(Dollars in Millions)
<CAPTION> Three Months
Ended March 31, Years Ended December 31,
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS AVAILABLE FOR FIXED CHARGES
- Income before provision for income taxes $377.4 $333.3 $1,675.7 $1,448.1 $1,299.4 $1,246.3 $1,157.2
- Minority interest in operating results of
majority-owned subsidiaries, less equity in
undistributed operating results of
less-than-50% owned affiliates (0.1) 2.2 6.9 5.3 5.1 0.6 1.3
- Provision for income taxes of 50% owned
affiliates included in consolidated income
before provision for income taxes 8.7 7.2 34.2 29.4 34.1 28.8 29.3
- Portion of rent charges (after reduction
for rental income from subleased
properties) considered to be representative
of interest factors* 18.1 16.8 71.6 70.1 67.9 59.0 51.8
- Interest expense, amortization of debt
discount and issuance costs, and
depreciation of capitalized interest* 82.4 89.3 358.0 413.8 433.9 411.9 332.3
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$486.5 $448.8 $2,146.4 $1,966.7 $1,840.4 $1,746.6 $1,571.9
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FIXED CHARGES
- Portion of rent charges (after reduction
for rental income from subleased
properties) considered to be representative
of interest factors* $18.1 $16.8 $71.6 $70.1 $67.9 $59.0 $51.8
- Interest expense and amortization of debt
discount and issuance costs* 81.5 87.0 349.3 405.4 425.7 403.4 324.8
- Capitalized interest* 3.9 3.3 20.7 20.5 28.5 38.9 31.8
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$103.5 $107.1 $441.6 $496.0 $522.1 $501.3 $408.4
===========================================================================
RATIO OF EARNINGS TO FIXED CHARGES 4.70 4.19 4.86 3.96 3.53 3.48 3.85
===========================================================================
*Includes amounts of the Registrant and its majority-owned subsidiaries, and one-half of the amounts of 50%-owned affiliates.
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