<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 June 30, 1995
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
--- ---
693,998,345
---------------------------------
(Number of shares of common stock
outstanding as of June 30, 1995)<PAGE>
<PAGE> 2
McDONALD'S CORPORATION
----------------------
INDEX
-----
Page Reference
Part I. Financial Information
Item 1 - Financial Statements
Condensed consolidated balance sheet,
June 30, 1995 (unaudited) and
December 31, 1994 3
Condensed consolidated statement of
income (unaudited), six months and
second quarters ended June 30, 1995
and 1994 4
Condensed consolidated statement of
cash flows (unaudited), six months and
second quarters ended June 30, 1995
and 1994 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 4 - Submission of Matters to a Vote
of Security Holders 14
Item 6 - Exhibits and Reports on Form 8-K 15
(a)Exhibits
The exhibits listed in the
accompanying Exhibit Index are filed
as part of this report 15
(b)Reports on Form 8-K 18
Signature 19<PAGE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements
-----------------------------
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEET
<CAPTION>
(unaudited)
Dollars in millions June 30, 1995 December 31, 1994
---------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and equivalents $ 319.0 $ 179.9
Accounts receivable 394.1 348.1
Notes receivable 32.9 31.2
Inventories, at cost, not in excess
of market 53.5 50.5
Prepaid expenses and other current
assets 147.3 131.0
---------------------------------------------------------------------------
TOTAL CURRENT ASSETS 946.8 740.7
---------------------------------------------------------------------------
OTHER ASSETS AND DEFERRED CHARGES 1,120.4 1,039.7
---------------------------------------------------------------------------
PROPERTY AND EQUIPMENT
Property and equipment, at cost 16,195.6 15,184.6
Accumulated depreciation and
amortization (4,128.7) (3,856.2)
---------------------------------------------------------------------------
NET PROPERTY AND EQUIPMENT 12,066.9 11,328.4
---------------------------------------------------------------------------
INTANGIBLE ASSETS-NET 523.4 483.1
---------------------------------------------------------------------------
TOTAL ASSETS $14,657.5 $13,591.9
===========================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 654.4 $ 1,046.9
Accounts payable 433.7 509.4
Income taxes 58.6 25.0
Accrued interest 104.9 107.7
Other accrued liabilities 426.3 394.0
Current maturities of long-term debt 208.5 368.3
---------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 1,886.4 2,451.3
---------------------------------------------------------------------------
LONG-TERM DEBT 3,976.7 2,935.4
OTHER LONG-TERM LIABILITIES AND
MINORITY INTERESTS 660.0 422.8
DEFERRED INCOME TAXES 762.5 840.8
---------------------------------------------------------------------------
TOTAL LIABILITIES 7,285.6 6,650.3
---------------------------------------------------------------------------<PAGE>
COMMON EQUITY PUT OPTIONS 52.8 56.2
---------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Preferred stock, no par value;
authorized - 165.0 million shares;
issued - 11.1 and 11.2 million 542.9 674.2
Common stock, no par value;
authorized - 1.25 billion shares;
issued - 830.3 million 92.3 92.3
Additional paid-in capital 313.5 286.0
Guarantee of ESOP notes (233.9) (234.4)
Retained earnings 9,174.2 8,625.9
Foreign currency translation
adjustment (58.1) (114.9)
Common stock in treasury, at cost;
136.3 and 136.6 million shares (2,511.8) (2,443.7)
---------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 7,319.1 6,885.4
---------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $14,657.5 $13,591.9
===========================================================================
See accompanying Financial comments.
/TABLE
<PAGE>
<PAGE> 4
<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
<CAPTION>
Dollars in millions, except Six Months Ended Quarters Ended
per common share data June 30 June 30
1995 1994 1995 1994
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES
Sales by Company-operated
restaurants $3,239.4 $2,654.0 $1,727.8 $1,409.3
Revenues from franchised
restaurants 1,389.5 1,171.3 739.8 620.0
------------------------------------------------------------------------------
TOTAL REVENUES 4,628.9 3,825.3 2,467.6 2,029.3
------------------------------------------------------------------------------
OPERATING COSTS AND EXPENSES
Company-operated restaurants 2,622.9 2,146.0 1,389.7 1,128.6
Franchised restaurants-
occupancy costs 246.0 206.0 127.8 105.6
General, administrative and
selling expenses 580.8 496.5 305.4 257.0
Other operating (income)
expense-net (53.9) (50.7) (41.7) (30.3)
------------------------------------------------------------------------------
TOTAL OPERATING COSTS
AND EXPENSES 3,395.8 2,797.8 1,781.2 1,460.9
------------------------------------------------------------------------------
OPERATING INCOME 1,233.1 1,027.5 686.4 568.4
------------------------------------------------------------------------------
Interest expense 166.4 145.4 85.4 73.6
Nonoperating income
(expense)-net (46.7) (8.2) (16.1) 1.7
------------------------------------------------------------------------------
INCOME BEFORE PROVISION FOR
INCOME TAXES 1,020.0 873.9 584.9 496.5
------------------------------------------------------------------------------
Provision for income taxes 359.6 308.2 205.2 174.2
------------------------------------------------------------------------------
NET INCOME $ 660.4 $ 565.7 $ 379.7 $ 322.3
==============================================================================
NET INCOME PER COMMON SHARE $ .90 $ .77 $ .52 $ .44
------------------------------------------------------------------------------
DIVIDENDS PER COMMON SHARE $ .1275 $ .1138 $ .0675 $ .06
------------------------------------------------------------------------------
See accompanying Financial comments.
/TABLE
<PAGE>
<PAGE> 5
<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<CAPTION>
Six Months Ended Quarters Ended
June 30 June 30
Dollars in millions 1995 1994 1995 1994
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income $660.4 $565.7 $379.7 $322.3
Adjustments to reconcile to cash
provided by operations
Depreciation and amortization 345.9 296.5 177.1 148.6
Changes in operating working
capital items (80.7) (69.4) (8.4) (56.1)
Other 16.7 (23.7) (11.9) (22.5)
-------------------------------------------------------------------------------
CASH PROVIDED BY OPERATIONS 942.3 769.1 536.5 392.3
-------------------------------------------------------------------------------
INVESTING ACTIVITIES
Property and equipment expenditures (792.9) (620.7) (445.2) (360.5)
Purchases and sales of restaurant
businesses and sales of other property 20.2 38.0 12.1 30.0
Other (84.5) (3.0) (76.4) 1.8
-------------------------------------------------------------------------------
CASH USED FOR INVESTING ACTIVITIES (857.2) (585.7) (509.5) (328.7)
-------------------------------------------------------------------------------
FINANCING ACTIVITIES
Notes payable and long-term
financing issuances and repayments 226.8 48.4 216.7 121.7
Treasury stock purchases (89.1) (187.9) (82.2) (160.0)
Common and preferred stock dividends (114.4) (106.2) (59.8) (55.4)
Other 30.7 23.9 19.1 9.4
-------------------------------------------------------------------------------
CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES 54.0 (221.8) 93.8 (84.3)
-------------------------------------------------------------------------------
CASH AND EQUIVALENTS INCREASE
(DECREASE) 139.1 (38.4) 120.8 (20.7)
-------------------------------------------------------------------------------
Cash and equivalents at beginning of
period 179.9 185.8 198.2 168.1
-------------------------------------------------------------------------------
CASH AND EQUIVALENTS AT END OF PERIOD $319.0 $147.4 $319.0 $147.4
===============================================================================
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 1994 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 $23.8 and $23.7 million
for the first six months of 1995 and 1994, and $11.9 and $11.8 million
for the second quarters of 1995 and 1994, respectively. In addition,
net income available to common shareholders for 1995 periods was
reduced by $3.9 million for the one-time effect of the Company's
exchange of Series E Cumulative Preferred Stock for subordinated debt
securities which was completed on June 30, 1995. Adjusted net income
was divided by the weighted average shares of common stock
outstanding: 700.2 and 706.1 million for the six months ended June 30,
1995 and 1994, and 700.1 and 704.7 million for the second quarters of
1995 and 1994, respectively. The effect of potentially dilutive
securities was not material.
COMMON EQUITY PUT OPTIONS
During November and December 1994, the Company sold 2.0 million common
equity put options which expired unexercised in the first quarter of
1995. During May and June 1995, the Company sold 1.5 million common
equity put options which are exercisable in August and September 1995.
The total exercise prices of $56.2 and $52.8 million at December 31,
1994 and June 30, 1995, respectively, were classified in common equity
put options, and the related offsets were recorded in common stock in
treasury, net of premiums received.
PREFERRED STOCK
On June 26, 1995, the Company gave notice of its plan to redeem
3,115,029 shares of Series B ESOP Convertible Preferred Stock and
4,464,055 shares of its Series C ESOP Convertible Preferred Stock for
common stock on August 14, 1995. Prior to the redemption, each Series
B and Series C Preferred Share is convertible into .7692 and .8 share
of common stock, respectively.
LINE OF CREDIT AGREEMENT
Effective April 19, 1995, the Company cancelled its existing $700.0
million line of credit agreement and entered into a new $675.0 million
five-year revolving credit agreement with various banks. Accordingly,
$675.0 million of notes maturing within one year have been
reclassified as long-term debt. In June 1995, the Company entered into
an additional $25.0 million line of credit agreement with various
banks for a renewable term of 364 days. Both agreements remained
unused at June 30, 1995, and provide for fees of .07% per annum on the
total commitment.<PAGE>
<PAGE> 7
Item 2. Management's Discussion And Analysis Of Financial Condition
--------------------------------------------------------------------
And Results Of Operations
-------------------------
<TABLE>
INCREASES (DECREASES) IN OPERATING RESULTS OVER 1994
<CAPTION>
Dollars in millions, except Six Months Second Quarter
per common share data Ended June 30 Ended June 30
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SYSTEMWIDE SALES $2,233.5 18% $1,271.1 20%
-------------------------------------------------------------------------
REVENUES
Sales by Company-operated
restaurants $ 585.4 22% $ 318.5 23%
Revenues from franchised
restaurants 218.2 19 119.8 19
-------------------------------------------------------------------------
TOTAL REVENUES 803.6 21 438.3 22
-------------------------------------------------------------------------
OPERATING COSTS AND EXPENSES
Company-operated restaurants 476.9 22 261.1 23
Franchised restaurants-
occupancy costs 40.0 19 22.2 21
General, administrative
and selling expenses 84.3 17 48.4 19
Other operating (income)
expense-net (3.2) 6 (11.4) 38
-------------------------------------------------------------------------
TOTAL OPERATING COSTS
AND EXPENSES 598.0 21 320.3 22
-------------------------------------------------------------------------
OPERATING INCOME 205.6 20 118.0 21
-------------------------------------------------------------------------
Interest expense 21.0 14 11.8 16
Nonoperating income
(expense)-net (38.5) N/M (17.8) N/M
-------------------------------------------------------------------------
INCOME BEFORE PROVISION FOR
INCOME TAXES 146.1 17 88.4 18
-------------------------------------------------------------------------
Provision for income taxes 51.4 17 31.0 18
-------------------------------------------------------------------------
NET INCOME $94.7 17% $57.4 18%
=========================================================================
NET INCOME PER COMMON SHARE $ .13 17% $ .08 18%
-------------------------------------------------------------------------
NM - Not Meaningful
/TABLE
<PAGE>
<PAGE> 8
CONSOLIDATED OPERATING RESULTS
Net income and net income per common share increased 17 and 18% for
the six months and quarter, respectively. As of June 30, 1995, the
Company had repurchased about $600 million of its common stock in
connection with a three-year, $1 billion program announced in January
1994.
Systemwide sales represent sales by Company-operated, franchised
and affiliated restaurants and satellites. The increases were due to
expansion and higher sales at existing locations worldwide, aided by
stronger foreign currencies.
----------------------------------------------------------------------
LOCATIONS Six Months Ended Quarters Ended
June 30 June 30
1995 1994 1995 1994
----------------------------------------------------------------------
ADDITIONS
U.S. 184 142 133 102
Outside of the U.S. 318 223 204 138
----------------------------------------------------------------------
Total restaurant additions 502 365 337 240
----------------------------------------------------------------------
Total satellite additions 332 183 194 112
----------------------------------------------------------------------
At June 30
----------------------------------------------------------------------
UNDER CONSTRUCTION
U.S. 130 115
Outside of the U.S. 260 215
----------------------------------------------------------------------
Total restaurants 390 330
----------------------------------------------------------------------
Total revenues consist of sales by Company-operated restaurants
and satellites, and fees from restaurants and satellites operated by
franchisees and affiliates. These fees are based upon a percent of
sales with specified minimum payments. The increases reflected strong
worldwide operating results.
Franchised margin dollars comprised about two-thirds of the
combined operating margins, the same as in the prior year. Franchised
margins as a percent of revenues declined slightly for both periods,
reflecting a higher proportion of leased sites resulting from
expansion and satellite development. Company-operated margins as a
percent of sales declined slightly for both periods; as a percent of
sales, food and paper costs increased, while payroll costs declined
and occupancy and other operating costs remained flat.<PAGE>
<PAGE> 9
-----------------------------------------------------------------------
CONSOLIDATED MARGINS Six Months Ended Quarters Ended
June 30 June 30
1995 1994 1995 1994
-----------------------------------------------------------------------
In millions of dollars
Franchised $1,143.5 $965.3 $612.0 $514.4
Company-operated 616.5 508.0 338.1 280.7
-----------------------------------------------------------------------
As a percent of sales/revenues
Franchised 82.3 82.4 82.7 83.0
Company-operated 19.0 19.1 19.6 19.9
-----------------------------------------------------------------------
The increases in general, administrative and selling expenses were
primarily due to strategic global spending to support the convenience
and value strategies and stronger foreign currencies.
Other operating transactions relate to franchising and the
foodservice business, the details of which are shown below. The
increases occurred because of greater income from affiliates,
principally Japan, offset in part by higher provisions for property
dispositions which were included in the other category.
------------------------------------------------------------------------
OTHER OPERATING (INCOME) Six Months Ended Quarters Ended
EXPENSE-NET June 30 June 30
In millions of dollars 1995 1994 1995 1994
------------------------------------------------------------------------
Gains on sales of restaurant
businesses $(28.4) $(30.4) $(16.5) $(13.0)
Equity in earnings of
unconsolidated affiliates (47.7) (18.3) (28.5) (7.4)
Other 22.2 (2.0) 3.3 (9.9)
------------------------------------------------------------------------
Other operating (income)
expense-net $(53.9) $(50.7) $(41.7) $(30.3)
========================================================================
The increases in consolidated operating income primarily reflected
higher combined operating margins and stronger foreign currencies,
partially offset by higher general, administrative and selling
expenses.
The increases in interest expense were due to stronger foreign
currencies and higher debt levels, partially offset by lower average
interest rates.
Nonoperating income (expense) was impacted by higher losses on
investments and higher charges associated with minority interests.
The effective income tax rate was 35.3% for the first six months
of 1995 and 1994, compared to 35.1% for the year 1994.<PAGE>
<PAGE> 10
U.S. OPERATING RESULTS
Expansion and higher sales at existing restaurants were responsible
for driving U.S. sales. Positive comparable sales were achieved in all
comparable periods of 1995 and 1994 through an emphasis on value and
customer satisfaction in the form of Extra Value Meals, Happy Meals
and the three-tier value program. Additionally in 1995, programs such
as 95 cents Big Mac/Egg McMuffin in January, 95 cents Double
Cheeseburger/Sausage McMuffin with Egg in February, various offerings
as Taste of the Month, the Monopoly promotion in May, and the Batman
Forever promotion featuring the Super Hero Burger in June contributed
to higher sales.
----------------------------------------------------------------------
U.S. OPERATING RESULTS Six Months Ended Quarters Ended
June 30 June 30
1995 1994 1995 1994
----------------------------------------------------------------------
Percent increase
Sales 8 6 9 5
Revenues 9 6 9 6
Operating income 3 8 3 9
----------------------------------------------------------------------
As a percent of sales/revenues
Company-operated margins 17.6 19.3 18.7 20.6
Franchised margins 82.8 83.0 83.2 83.6
----------------------------------------------------------------------
The increases in U.S. operating income were driven by higher
franchised margin dollars, partially offset by higher general,
administrative and selling expenses. Company-operated margin dollars
were relatively flat for both periods. The decline as a percent of
sales resulted primarily from higher payroll costs due to higher
average hourly wages, and increased staffing levels designed to
improve customer satisfaction. Higher franchised margin dollars were
the direct result of expansion and improved sales trends.
OPERATING RESULTS OUTSIDE OF THE U.S.
Expansion, stronger foreign currencies and higher sales at existing
restaurants were responsible for driving sales outside of the U.S.
Comparable sales on a local currency basis were positive in all
comparable periods of 1995 and 1994.
----------------------------------------------------------------------
OPERATING RESULTS Six Months Ended Quarters Ended
OUTSIDE OF THE U.S. June 30 June 30
1995 1994 1995 1994
----------------------------------------------------------------------
Percent increase
Sales 34 11 37 9
Revenues 34 11 35 11
Operating income 41 15 44 12
----------------------------------------------------------------------
As a percent of sales/revenues
Company-operated margins 20.1 19.0 20.2 19.3
Franchised margins 81.5 81.4 82.0 81.8
----------------------------------------------------------------------<PAGE>
<PAGE> 11
All geographic segments reported excellent operating results, and
results for the following markets were noteworthy: Canada; Australia,
Hong Kong, Taiwan and Japan in Asia/Pacific; France, Germany, England
and Spain in Europe/Africa/Middle East; and Brazil in Latin America.
Transactions, sales and profits have improved notably in France,
England, Germany, Japan and Brazil in 1995. Results in Mexico
continued to be impacted by the economy and currency devaluation;
however, we continue to believe this market offers long-term potential
for McDonald's.
The increase in operating income outside of the U.S. resulted from
expansion, higher comparable sales, higher combined operating margins
and stronger foreign currencies, partially offset by higher general,
administrative and selling expenses.
The improvement in Company-operated margins as a percent of sales
reflected better operating performance, principally in Brazil. The
increase in operating margin dollars occurred because of better sales
and stronger foreign currencies.
IMPACT OF FOREIGN CURRENCIES ON REPORTED RESULTS
The Deutsche Mark, French Franc, British Pound Sterling and Japanese
Yen represented the foreign currencies which significantly contributed
to the impact on reported results for 1995. If exchange rates had
remained at 1994 levels, reported results would have been as follows:
---------------------------------------------------------------
FOREIGN CURRENCY IMPACT Six Months Ended June 30, 1995
Dollars in millions Reported Adjusted
---------------------------------------------------------------
Systemwide sales $14,312.9 18% $13,720.4 14%
Operating income 1,233.1 20 1,175.8 14
Net income 660.4 17 635.6 12
---------------------------------------------------------------
Quarter Ended June 30, 1995
Reported Adjusted
---------------------------------------------------------------
Systemwide sales $7,641.3 20% $7,289.0 14%
Operating income 686.4 21 653.7 15
Net income 379.7 18 364.6 13
---------------------------------------------------------------
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.
FINANCIAL POSITION
Cash provided by operations for the six months increased 23%. Together
with other sources of cash such as borrowings, cash provided by
operations was used primarily for capital expenditures, debt
repayments and dividends. In connection with accelerated expansion,
U.S. capital expenditures increased 15% and capital expenditures
outside of the U.S. increased 39% in the first six months.
In June, the Company completed an exchange for $130 million of its
Series E Cumulative Preferred Stock for subordinated debt securities.<PAGE>
<PAGE> 12
<TABLE>
SIX MONTHS AND SECOND QUARTER HIGHLIGHTS
<CAPTION>
OPERATING RESULTS
---------------------------------------------------------------------------
In millions of dollars, Six Months Ended Quarters Ended
except per common share data June 30 June 30
1995 1994 1995 1994
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Systemwide sales $14,312.9 $12,079.4 $7,641.3 $6,370.2
---------------------------------------------------------------------------
U.S. sales 7,750.9 7,166.7 4,146.3 3,820.3
Operated by franchisees 6,093.6 5,749.5 3,257.6 3,064.6
Operated by the Company 1,333.6 1,229.4 711.3 654.1
Operated by affiliates 323.7 187.8 177.4 101.6
---------------------------------------------------------------------------
Sales outside of the U.S. 6,562.0 4,912.7 3,495.0 2,549.9
Operated by franchisees 3,111.8 2,332.0 1,661.8 1,223.9
Operated by the Company 1,905.8 1,424.6 1,016.5 755.2
Operated by affiliates 1,544.4 1,156.1 816.7 570.8
---------------------------------------------------------------------------
Total revenues 4,628.9 3,825.3 2,467.6 2,029.3
U.S. 2,174.5 1,993.3 1,160.6 1,060.3
Outside of the U.S. 2,454.4 1,832.0 1,307.0 969.0
---------------------------------------------------------------------------
Operating income* 1,233.1 1,027.5 686.4 568.4
U.S. 614.2 595.9 344.8 335.9
Outside of the U.S. 641.3 454.0 353.2 244.6
Corporate (22.4) (22.4) (11.6) (12.1)
---------------------------------------------------------------------------
Income before provision for
income taxes 1,020.0 873.9 584.9 496.5
Net income 660.4 565.7 379.7 322.3
Net income per common share .90 .77 .52 .44
---------------------------------------------------------------------------
Cash provided by operations 942.3 769.1 536.5 392.3
---------------------------------------------------------------------------
*1994 operating income has been restated to reflect a more meaningful
allocation of general, administrative and selling expenses between
the U.S. and international segments and now includes an additional
corporate category which is not allocated.
/TABLE
<PAGE>
<PAGE> 13
<TABLE>
RESTAURANTS
<CAPTION>
-------------------------------------------------------------------------
At June 30, 1995 1994
-------------------------------------------------------------------------
<S> <C> <C>
Systemwide restaurants 15,707 14,358
-------------------------------------------------------------------------
U.S. restaurants 9,928 9,425
Operated by franchisees 7,902 7,694
Operated by the Company 1,598 1,482
Operated by affiliates 428 249
-------------------------------------------------------------------------
Restaurants outside of the U.S. 5,779 4,933
Operated by franchisees 2,770 2,351
Operated by the Company 1,642 1,408
Operated by affiliates 1,367 1,174
-------------------------------------------------------------------------
/TABLE
<PAGE>
<PAGE> 14
PART II
Item 4. Submission of Matters to a Vote of Security Holders
------------------------------------------------------------
(a) The Annual Meeting of Shareholders was held on May 26, 1995.
(b) Not Applicable.
(c) At the Annual Meeting, the shareholders:
(i) Voted to elect six directors to serve until the 1998
Annual Meeting of Shareholders. Each nominee was elected
by a vote of the shareholders as follows:
Director For Withheld
-------- --- --------
Jack M. Greenberg 597,060,913 4,188,752
Donald G. Lubin 596,901,919 4,347,746
Andrew J. McKenna 596,911,957 4,337,708
Edward H. Rensi 597,867,062 3,382,603
Roger W. Stone 598,611,623 2,638,042
Robert N. Thurston 598,722,480 2,527,185
(ii) Voted upon the adoption of the Non-Employee Director Stock
Option Plan (the "Option Plan"). The Option Plan was
approved by a vote of the shareholders as follows:
FOR: 552,952,099
AGAINST: 43,105,270
ABSTAIN: 5,192,296
(iii) Voted upon the approval of the Amended and Restated 1992
Stock Ownership Incentive Plan (the "1992 Plan"). The
1992 Plan was approved by a vote of shareholders as
follows:
FOR: 467,740,326
AGAINST: 128,853,103
ABSTAIN: 4,656,236
(d) Not Applicable.<PAGE>
<PAGE> 15
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------
(a) - Exhibits
--------------
Exhibit Number Description
-------------- -----------
(3) Restated Certificate of Incorporation and By-Laws, dated as
of November 15, 1994, incorporated herein by reference from
Exhibit 3 of Form 10-K for the year ended December 31, 1994.
(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) 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.
(v) Medium-Term Notes, Series C, due from nine
months (U.S. issue)/184 days (Euro issue) 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 June 30, 1991.<PAGE>
<PAGE> 16
Exhibit Number Description
-------------- -----------
(vi) 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.
(vii) Medium-Term Notes, Series D, due from nine
months (U.S. issue)/184 days (Euro issue) 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.
(viii)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.
(ix) 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.
(x) 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.
(xi) Medium-Term Notes, Series E, due from nine
months to 60 years from date of issue. Form of
Supplemental Indenture No. 22, attached hereto
as an Exhibit.
(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.<PAGE>
<PAGE> 17
Exhibit Number Description
-------------- -----------
(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.
(f) 8.35% Subordinated Deferrable Interest Debentures due
2025. Indenture incorporated herein by reference from
Exhibit 99.1 of Schedule 13E-4/A Amendment No. 2 dated
July 14, 1995.
(10) Material Contracts
(a) Directors' Stock Plan, as amended and restated,
incorporated herein by reference from Form 10-K for the
year ended December 31, 1994.*
(b) Profit Sharing Program, as amended and restated,
incorporated herein by reference from Form 10-K for the
year ended December 31, 1994.*
(c) 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 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 Form 10-K for the year
ended December 31, 1993.<PAGE>
<PAGE> 18
Exhibit Number Description
-------------- -----------
(iv) Amendment No. 2 to McDonald's Supplemental
Employee Equalization Plan, incorporated herein
by reference from 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, as amended and restated,
incorporated herein by reference from Form 10-K for the
year ended December 31, 1994.*
(f) 1992 Stock Ownership Incentive Plan, as amended and
restated, incorporated herein by reference from Exhibit
B on pages 29-41 of McDonald's 1995 Proxy Statement and
Notice of 1995 Annual Meeting of Shareholders dated
April 12, 1995*.
(g) McDonald's Corporation Deferred Incentive Plan, as
amended and restated, incorporated herein by reference
from Form 10-K for the year ended December 31, 1994.*
(h) Non-Employee Director Stock Option Plan, incorporated
by reference from Exhibit A on pages 25-28 of
McDonald's 1995 Proxy Statement and Notice of 1995
Annual Meeting of Shareholders dated April 12, 1995.*
(11) Statement re: Computation of per share earnings.
(12) Statement re: Computation of ratios.
(27) Financial Data Schedule
--------------------
* 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
There were no reports on Form 8-K filed for the second quarter
covered by this report, and subsequently up to August 11, 1995.<PAGE>
<PAGE> 19
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
August 11, 1995
----------------
(Date)<PAGE>
Exhibit 4(a)(xi)
__________________________________
SUPPLEMENTAL INDENTURE NO. 22
BETWEEN
McDONALD'S CORPORATION
AND
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
Trustee
____________________
Dated as of August 4, 1995
____________________
SUPPLEMENTAL TO INDENTURE
DATED AS OF MARCH 1, 1987
___________________________________
McDONALD'S CORPORATION
SUPPLEMENTAL INDENTURE NO. 22
Dated as of August 4, 1995
Series of
Medium-Term Notes, Series E
$584,662,000
Supplemental Indenture No. 22, dated as of August 4, 1995, between
McDONALD'S CORPORATION, a corporation organized and existing under the
laws of the State of Delaware (hereinafter sometimes referred to as the
"Company"), and FIRST FIDELITY BANK, NATIONAL ASSOCIATION, a national
banking association, authorized to accept and execute trusts (hereinafter
sometimes referred to as the "Trustee"),
W I T N E S S E T H :
WHEREAS, The Company and the Trustee have executed and delivered an
Indenture dated as of March 1, 1987 (the "Indenture").
WHEREAS, Section 10.01 of the Indenture provides for the Company,
when authorized by its Board of Directors, and the Trustee to enter into
an indenture supplemental to the Indenture to establish the form or terms
of Debt Securities as permitted by Sections 2.01 and 2.02 of the
Indenture.
WHEREAS, Sections 2.01 and 2.02 of the Indenture provide for Debt
Securities of any series to be established pursuant to an indenture
supplemental to the Indenture.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
series of Debt Securities provided for herein, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of
such series of Debt Securities, as follows:
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS.
SECTION 1.01. This Supplemental Indenture No. 22 constitutes an
integral part of the Indenture.
SECTION 1.02. For all purposes of this Supplemental Indenture:
(1) Capitalized terms used herein without definition shall have the
meanings specified in the Indenture or in Exhibits A-H (as described
below) attached hereto.
(2) All references herein to Articles and Sections, unless
otherwise specified, refer to the corresponding Articles and Sections of
this Supplemental Indenture No. 22; and
(3) The terms "hereof," "herein," "hereto," "hereunder" and
"herewith" refer to this Supplemental Indenture.
ARTICLE TWO
THE SERIES OF DEBT SECURITIES
SECTION 2.01. (1) There shall be a series of Debt Securities
issuable as Fully Registered Debt Securities or Unregistered Debt
Securities (the "Notes") limited to an aggregate initial public offering
price or purchase price of $584,662,000, or the equivalent thereof in one
or more foreign or composite currencies, including the European Currency
Units as designated by the Company (the "Specified Currency"). The Notes
issuable as Fully Registered Debt Securities (the "Registered Notes")
shall be designated the "Medium-Term Notes, Series E Due from Nine Months
to 60 Years from Date of Issue" and the Notes issuable as Unregistered
Debt Securities (the "Unregistered Notes") shall be designated the
"Medium-Term Notes, Series E Due from 184 Days to 60 Years from Date of
Issue."
(2) $84,662,000 of the $584,662,000 established hereunder shall
replace the $84,662,000 remaining of the Company's Medium-Term Notes,
Series D Due from Nine Months to Sixty Years from Date of Issue and
Medium-Term Notes, Series D Due from 184 days to Thirty Years from Date
of Issue which were established under Supplemental Indenture No. 18.
(3) Each Note will bear interest either at a fixed rate (a "Fixed
Rate Note"), which may be zero in the case of Original Issue Discount
Notes (as defined below), or at a floating rate (a "Floating Rate Note")
or at a rate determined by reference to an Index (as defined below) in
the case of certain Index Notes (as defined below).
SECTION 2.02. Fixed Rate Notes and Floating Rate Notes which are
Registered Notes shall contain substantially the terms and provisions set
forth in either the form of Series E Fixed Rate Registered Note or the
form of Series E Floating Rate Registered Note attached hereto as
Exhibits A and B, respectively, or such other forms of Registered Notes
specified in an Officer's Certificate pursuant to duly adopted
resolutions of the Board of Directors of the Company. All of the terms
and provisions of such Registered Notes are hereby incorporated by
reference herein.
SECTION 2.03. (1) Fixed Rate Notes and Floating Rate Notes which
are Unregistered Notes shall contain substantially the terms and
provisions set forth in one or more of the following forms: (i) Fixed
Rate Temporary Global Note representing Medium-Term Notes, Series E,
attached hereto as Exhibit C; (ii) Floating Rate Temporary Global Note
representing Medium-Term Notes, Series E, attached hereto as Exhibit D;
(iii) Fixed Rate Permanent Global Note representing Medium-Term Notes,
Series E, attached hereto as Exhibit E; (iv) Floating Rate Permanent
Global Note, representing Medium-Term Notes, Series E, attached hereto as
Exhibit F; (v) Series E Fixed Rate Bearer Note attached hereto as Exhibit
G; (vi) Series E Floating Rate Bearer Note attached hereto as Exhibit H
or (vii) such other forms of Unregistered Notes specified in an Officer's
Certificate pursuant to duly adopted resolutions of the Board of
Directors of the Company. All of the terms and provisions of such
Unregistered Notes are hereby incorporated by reference herein.
SECTION 2.04. If any provision of the Indenture or this
Supplemental Indenture No. 22 limits, qualifies, or conflicts with
another provision of a Note, such provision in such Note shall control.
SECTION 2.05. In addition to the terms described in Sections 2.02
and 2.03, herein, respectively, a Registered Note or an Unregistered
Note, as the case may be, shall contain the following terms to be
specified in an Officer's Certificate:
(1) the principal amount and Specified Currency for such Note (and,
if the Specified Currency is other than U.S. dollars, certain other terms
relating to such Note and such Specified Currency, including the
authorized denominations of such Note); (2) whether such Note is a Fixed
Rate Note, Floating Rate Note or an Indeed Note (as defined below) as to
which interest is determined by reference to an Index (as defined below);
(3) the price (expressed as a percentage of the aggregate principal
amount thereof) at which such Note will be issued (the "Issue Price");
(4) the date on which such Note will be issued (the "Original Issue
Date"); (5) the date on which such Note will mature (the "Stated
Maturity"); (6) if such Note is a Fixed Rate Note, the rate per annum at
which such Note will bear interest, if any, and the dates on which
interest will be payable if other than February 15 and August 15 in the
case of a Registered Note, or February 15 and August 15 in the case of an
Unregistered Note; (7) if such Note is a Floating Rate Note, the Base
Rate, the Initial Interest Rate, the Interest Reset Period, the Interest
Payment Dates, the Index Maturity, the Maximum Interest Rate, if any, the
Minimum Interest Rate, if any, the Spread or Spread Multiplier, if any
(all as defined in Sections 2.02 and 2.08 herein), and any other terms
relating to the particular method of calculating the interest rate for
such Note; (8) whether such Note is an Original Issue Discount Note (as
defined below); (9) if such Note is an Indexed Note (as defined below),
the manner in which the principal amount of the Note payable at Stated
Maturity and/or the interest amount payable will be determined (other
than as described in Section 2.08 hereof); (10) whether such Note may be
redeemed at the option of the Company, or repaid at the option of the
Holder, prior to Stated Maturity and, if so, the provisions (other than
the redemption and prepayment provisions specified in Sections 2.02 and
2.03 herein) relating to such redemption or repayment, including, in the
case of an Original Issue Discount Note, Index Note or Amortizing Note
(each as defined below), the information necessary to determine the
amount due upon redemption or repayment; (11) if such Note is an
Amortizing Note, information necessary to determine the repayment
schedule, including the manner in which payments thereon will be applied
to interest and the reduction of unpaid principal; and (12) any other
terms of such Note not inconsistent with the provisions of the Indenture.
SECTION 2.06. (1) The First National Bank of Chicago, One First
National Plaza, Chicago, is hereby initially appointed as Authenticating
Agent, Registrar, Paying Agent and Calculation Agent with respect to the
Registered Notes.
(2) Morgan Guaranty Trust Company of New York, London Office, 60
Victoria Embankment, London, is hereby initially appointed as
Authenticating Agent, Principal Paying Agent and Calculation Agent with
respect to the Unregistered Notes.
SECTION 2.07. With respect to any Notes issued hereunder,
(1) the term "Original Issue Discount Note" shall mean (a) a Note,
including any such Note whose interest rate is zero, that has a stated
redemption price at maturity that exceeds its Issue Price by at least
0.25% of its aggregate principal amount, multiplied by the number of full
years from the Original Issue Date to the Stated Maturity for such Note
and (b) any other Note designated by the Company as issued with original
issue discount for United States federal income tax purposes; and
(2) the term "Yield to Stated Maturity" shall mean the yield to
Stated Maturity, calculated at the time of issuance of the Notes or, if
applicable, at the most recent redetermination of interest on such Notes
and calculated in accordance with accepted financial practice.
SECTION 2.08. (1) With respect to any Notes hereunder, the term
"Indexed Note" shall mean a Note, the principal amount payable at Stated
Maturity of which (the "Indexed Principal Amount") and/or the interest
amount payable on which is determined by reference to a measure (the
"Index") which will be related to (i) the rate of exchange between the
Specified Currency for such Note and the other currency or composite
currency (the "Indexed Currency") specified in such Indexed Note (such
Indexed Note, "Currency Indexed Note"); (ii) the difference in the price
of a specified commodity (the "Indexed Commodity") on specified dates
(such Indexed Note, "Commodity Indexed Note"), (iii) the difference in
the level of a specified stock index (the "Stock Index"), which may be
based on U.S. or foreign stocks, on specified dates (such Indexed Note,
"Stock Indexed Note") or (iv) such other objective price or economic
measures as are described in such Indexed Note.
(2) Unless otherwise specified in an Indexed Note, interest on such
Indexed Note will be payable by the Company based on the amount
designated therein as the "Face Amount" of such Indexed Note. Such
Indexed Note will describe whether the principal amount of such Indexed
Note that would be payable upon redemption or repayment prior to Stated
Maturity will be the Face Amount of such Indexed Note, the Indexed
Principal Amount of such Indexed Note at the time of redemption or
repayment, or another amount described in such Indexed Note.
SECTION 2.09. With respect to any Notes hereunder, the term
"Amortizing Notes" shall mean any Note, payments in respect of which
represent interest due and the reduction of unpaid principal as provided
in such Amortizing Note.
SECTION 2.10. Any interest on any Registered Note which is payable,
but is not punctually paid or duly provided for, on any Interest Payment
Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Registered Holder on the relevant Regular Record Date by
virtue of having been such Holder; and such Defaulted Interest may be
paid by the Company, at its election in each case, as provided in Clause
(1) and Clause (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Registered Notes are registered at the
close of business on a special record date ("Special Record Date") for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee (and any paying
agent designated by the Company) in writing of the amount of Defaulted
Interest proposed to be paid on each Registered Note and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee or any paying agent designated by the Company an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
or with any paying agent designated by the Company for such deposit prior
to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this SECTION 2.09 provided. Thereupon the Trustee or a
paying agent designated by the Company shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 nor less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee or a paying agent
designated by the Company of the notice of the proposed payment. The
Trustee or a paying agent designated by the Company shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first class postage prepaid, to each Holder of Registered Notes
at his address as it appears in the Debt Security Register, not less than
10 days prior to such Special Record Date. The Trustee or a paying agent
designated by the Company may, in its discretion, in the name and at the
expense of the Company, cause a similar notice to be published at least
once in an Authorized Newspaper in each Place of Payment, but such
publication shall not be a condition precedent to the establishment of
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the Persons
in whose names the Registered Notes are registered on such Special Record
Date and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Registered Notes may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee or any paying agent designated by the
Company of the proposed payment pursuant to this Clause, such payment
shall be deemed practicable by the Trustee or any paying agent designated
by the Company. Subject to the foregoing provisions of this Section,
each Registered Note delivered under this Supplemental Indenture No. 22
upon transfer of or in exchange for or in lieu of any other Registered
Note shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Registered Note.
SECTION 2.11. (1) Any interest on any Unregistered Note which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date for such Unregistered Note, shall be payable pursuant to
such procedures as may be satisfactory to the Trustee or any paying agent
designated by the Company in such manner that there is no discrimination
between the Holders of Registered Notes and Unregistered Notes and notice
of the payment date therefor shall be given by the Trustee or any paying
agent, in the name and at the expense of the Company in the manner
provided in Section 14.05 of the Indenture not more than 25 days and not
less than 20 days prior to the date of the proposed payment.
(2) Subject to the foregoing, each Unregistered Note delivered
under this Supplemental Indenture No. 22 in exchange for or in lieu of
any other Unregistered Note shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Unregistered
Note.
ARTICLE THREE
MISCELLANEOUS
SECTION 3.01. The recitals of fact herein and in the Notes shall be
taken as statements of the Company and shall not be construed as made by
the Trustee.
SECTION 3.02. This Supplemental Indenture No. 22 shall be construed
in connection with and as a part of the Indenture.
SECTION 3.03. (1) If any provision of this Supplemental Indenture
No. 22 limits, qualifies, or conflicts with another provision of the
Indenture required to be included in indentures qualified under the Trust
Indenture Act of 1939 (as in effect on the date of this Supplemental
Indenture No. 22) by any of the provisions of Section 310 to 317,
inclusive, of the said Trust Indenture Act, such required provisions
shall control.
(2) In case any one or more of the provisions contained in this
Supplemental Indenture No. 22 or in the Notes issued hereunder should be
invalid, illegal, or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and
therein shall not in any way be affected, impaired, prejudiced or
disturbed thereby.
SECTION 3.04. Whenever in this Supplemental Indenture No. 22 either
of the parties hereto is named or referred to, this shall be deemed to
include the successors or assigns of such party, and all the covenants
and agreements in this Supplemental Indenture No. 22 contained by or on
behalf of the Company or by or on behalf of the Trustee shall bind and
inure to the benefit of the respective successors and assigns of such
parties, whether so expressed or not.
SECTION 3.05. (1) This Supplemental Indenture No. 22 may be
simultaneously executed in several counterparts, and all said
counterparts executed and delivered, each as an original, shall
constitute but one and the same instrument.
(2) The descriptive headings of the several Articles of this
Supplemental Indenture No. 22 were formulated, used and inserted herein
for convenience only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, McDONALD'S CORPORATION has caused this
Supplemental Indenture No. 22 to be signed, acknowledged and delivered by
its President, Vice Chairman and Chief Financial Officer or Vice President
and Treasurer and its corporate seal to be affixed hereunto and the same
to be attested by its Secretary or Assistant Secretary, and FIRST FIDELITY
BANK, NATIONAL ASSOCIATION, as Trustee, has caused this Supplemental
Indenture No. 22 to be signed, acknowledged and delivered by one of its
Assistant Vice Presidents, and its seal to be affixed hereunto and the
same to be attested by one of its Authorized Officers, all as of the day
and year first written above.
McDONALD'S CORPORATION
[CORPORATE SEAL]
By: /s/ Carleton D. Pearl
--------------------------------
Carleton D. Pearl
Vice President and Treasurer
Attest:
/s/ Gloria Santona
-------------------------
Assistant Secretary
FIRST FIDELITY BANK, NATIONAL ASSOCIATION,
as Trustee
[CORPORATE SEAL]
By: /s/ John H. Clapham
----------------------------------
Assistant Vice President
Attest:
/s/ Terence C. McPoyle
-------------------------
Authorized Officer
STATE OF ILLINOIS
SS:
COUNTY OF DuPAGE
On the 4th day of August, in the year one thousand nine hundred
ninety-five, before me appeared Carleton Day Pearl to me personally known,
who, being by me duly sworn, did say that he resides in Chicago, Illinois,
that he is a Vice President and Treasurer of McDONALD'S CORPORATION, one
of the corporations described in and which executed the above instrument;
that he knows the seal of said corporation, that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation; and that he signed his name
thereto by like authority.
/s/ Mary Velazquez
-------------------------------
Notary Public
STATE OF PENNSYLVANIA
SS:
COUNTY OF
On the 2nd day of August, in the year one thousand nine hundred
ninety-five, before me appeared John H. Clapham to be personally known, who,
being by me duly sworn, did say that he resides at La Berwyn, Pennsylvania,
that he is an Assistant Vice President of FIDELITY BANK, NATIONAL
ASSOCIATION, one of the corporations described in and which executed the
above instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation; and
that he signed his name thereto by like authority.
/s/ Donna H. Fisher
------------------------
Notary Public <PAGE>
<PAGE> 20
<TABLE>
Exhibit 11
McDONALD'S CORPORATION
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
Dollars and shares in millions, except per common share data
<CAPTION> Six Months Ended Quarters Ended
June 30 June 30
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Income (A) $660.4 $565.7 $379.7 $322.3
Preferred Stock Dividends (net of tax benefits) (A) (23.8) (23.7) (11.9) (11.8)
------- ------- ------- -------
Net income available after preferred stock dividends 636.6 542.0 367.8 310.5
Effect of preferred stock exchange (B) (3.9) 0.0 (3.9) 0.0
Common stock dividends on assumed conversion of preferred stock 0.5 0.7 0.1 0.4
------- ------- ------- -------
Net income available to common shareholders $633.2 $542.7 $364.0 $310.9
======= ======= ======= =======
Weighted average number of common shares outstanding during the
period (A) 700.2 706.1 700.1 704.7
Additional shares related to potentially dilutive securities 20.9 21.4 20.6 21.2
------- ------- ------- -------
Adjusted weighted average common shares 721.1 727.5 720.7 725.9
======= ======= ======= =======
Fully diluted net income per common share $ 0.88 $ 0.75 $ 0.51 $ 0.43
------- ------- ------- -------
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.
(B) The 1995 periods include $3.9 million for the one-time effect of the Company's exchange of Series E Cumulative
Preferred Stock for subordinated debt securities completed in June, 1995.
/TABLE
<PAGE>
<PAGE> 21
<TABLE> Exhibit 12
McDONALD'S CORPORATION
STATEMENT RE: COMPUTATION OF RATIOS
Dollars in Millions
<CAPTION> Six Months
Ended June 30, Years Ended December 31,
--------------- --------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS AVAILABLE FOR FIXED CHARGES
- Income before provision for income taxes $1,020.0 $874.0 $1,886.6 $1,675.7 $1,448.1 $1,299.4 $1,246.3
- Minority interest in operating results of
majority-owned subsidiaries, including
fixed charges related to redeemable
preferred stock, less equity in
undistributed operating results of
less-than-50% owned affiliates 4.7 2.9 6.6 6.9 5.3 5.1 0.6
- Provision for income taxes of 50% owned
affiliates included in consolidated income
before provision for income taxes 27.0 10.2 34.9 34.2 29.4 34.1 28.8
- Portion of rent charges (after reduction
for rental income from subleased
properties) considered to be representative
of interest factors* 52.1 38.6 83.4 71.6 70.1 67.9 59.0
- Interest expense, amortization of debt
discount and issuance costs, and
depreciation of capitalized interest* 188.2 164.1 346.0 358.0 413.8 433.9 411.9
---------------------------------------------------------------------------
$1,292.0 $1,089.8 $2,357.5 $2,146.4 $1,966.7 $1,840.4 $1,746.6
===========================================================================
FIXED CHARGES
- Portion of rent charges (after reduction
for rental income from subleased
properties) considered to be representative
of interest factors* $52.1 $38.6 $83.4 $71.6 $70.1 $67.9 $59.0
- Interest expense, amortization of debt
discount and issuance costs, and fixed
charges related to redeemable preferred
stock* 194.6 162.7 343.9 349.3 405.4 425.7 403.4
- Capitalized interest* 10.1 9.1 21.0 20.7 20.5 28.5 38.9
---------------------------------------------------------------------------
$256.8 $210.4 $448.3 $441.6 $496.0 $522.1 $501.3
===========================================================================
RATIO OF EARNINGS TO FIXED CHARGES 5.03 5.18 5.26 4.86 3.96 3.53 3.48
===========================================================================
*Includes amounts of the Registrant and its majority-owned subsidiaries, and one-half of the amounts of 50%-owned affiliates.
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