<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, 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
--- ---
694,787,230
---------------------------------
(Number of shares of common stock
outstanding as of March 31, 1995)<PAGE>
<PAGE> 2
McDONALD'S CORPORATION
----------------------
INDEX
-----
Page Reference
Part I. Financial Information
Item 1 - Financial Statements
Condensed consolidated balance sheet,
March 31, 1995 (unaudited) and
December 31, 1994 3
Condensed consolidated statement of
income (unaudited), first quarters ended
March 31, 1995 and 1994 4
Condensed consolidated statement of
cash flows (unaudited), first quarters
ended March 31, 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 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 14
(b)Reports on Form 8-K 17
Signature 18<PAGE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements
-----------------------------
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEET
<CAPTION>
(unaudited)
(In millions of dollars) March 31, 1995 December 31, 1994
---------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and equivalents $ 198.2 $ 179.9
Accounts receivable 320.7 348.1
Notes receivable 30.7 31.2
Inventories, at cost, not in excess
of market 52.3 50.5
Prepaid expenses and other current
assets 138.3 131.0
---------------------------------------------------------------------------
TOTAL CURRENT ASSETS 740.2 740.7
---------------------------------------------------------------------------
OTHER ASSETS AND DEFERRED CHARGES 1,108.1 1,039.7
---------------------------------------------------------------------------
PROPERTY AND EQUIPMENT
Property and equipment, at cost 15,895.0 15,184.6
Accumulated depreciation and
amortization (4,048.2) (3,856.2)
---------------------------------------------------------------------------
NET PROPERTY AND EQUIPMENT 11,846.8 11,328.4
---------------------------------------------------------------------------
INTANGIBLE ASSETS-NET 518.4 483.1
---------------------------------------------------------------------------
TOTAL ASSETS $14,213.5 $13,591.9
===========================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 433.6 $ 1,046.9
Accounts payable 387.5 509.4
Income taxes 94.2 25.0
Accrued interest 123.9 107.7
Other accrued liabilities 453.1 394.0
Current maturities of long-term debt 66.2 368.3
---------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 1,558.5 2,451.3
---------------------------------------------------------------------------
LONG-TERM DEBT 3,986.4 2,935.4
OTHER LONG-TERM LIABILITIES AND
MINORITY INTERESTS 650.6 422.8
DEFERRED INCOME TAXES 771.4 840.8
COMMON EQUITY PUT OPTIONS 56.2
SHAREHOLDERS' EQUITY
Preferred stock, no par value;
authorized - 165.0 million shares;
issued - 11.2 million 673.2 674.2<PAGE>
Common stock, no par value;
authorized - 1.25 billion shares;
issued - 830.3 million 92.3 92.3
Additional paid-in capital 300.1 286.0
Guarantee of ESOP notes (234.2) (234.4)
Retained earnings 8,853.0 8,625.9
Foreign currency translation
adjustment (50.4) (114.9)
---------------------------------------------------------------------------
9,634.0 9,329.1
---------------------------------------------------------------------------
Common stock in treasury, at cost;
135.5 and 136.6 million shares (2,387.4) (2,443.7)
---------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 7,246.6 6,885.4
---------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $14,213.5 $13,591.9
===========================================================================
See accompanying Financial comments.
/TABLE
<PAGE>
<PAGE> 4
<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
<CAPTION>
(In millions of dollars, except Quarters Ended
per common share data) March 31
1995 1994
------------------------------------------------------------------------------
<S> <C> <C>
REVENUES
Sales by Company-operated
restaurants $1,511.6 $1,244.7
Revenues from franchised
restaurants 649.7 551.3
------------------------------------------------------------------------------
TOTAL REVENUES 2,161.3 1,796.0
------------------------------------------------------------------------------
OPERATING COSTS AND EXPENSES
Company-operated restaurants 1,233.2 1,017.4
Franchised restaurants-
occupancy costs 118.2 100.4
General, administrative and
selling expenses 275.4 239.5
Other operating (income)
expense-net (12.2) (20.4)
------------------------------------------------------------------------------
TOTAL OPERATING COSTS
AND EXPENSES 1,614.6 1,336.9
------------------------------------------------------------------------------
OPERATING INCOME 546.7 459.1
------------------------------------------------------------------------------
Interest expense 81.0 71.8
Nonoperating income
(expense)-net (30.6) (9.9)
------------------------------------------------------------------------------
INCOME BEFORE PROVISION FOR
INCOME TAXES 435.1 377.4
------------------------------------------------------------------------------
Provision for income taxes 154.4 134.0
------------------------------------------------------------------------------
NET INCOME $ 280.7 $ 243.4
==============================================================================
NET INCOME PER COMMON SHARE $ .39 $ .33
------------------------------------------------------------------------------
DIVIDENDS PER COMMON SHARE $ .06 $ .0538
------------------------------------------------------------------------------
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) 1995 1994
-------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $280.7 $243.4
Adjustments to reconcile to cash
provided by operations
Depreciation and amortization 168.8 147.9
Changes in operating working
capital items (72.3) (13.3)
Other 28.6 (1.2)
-------------------------------------------------------------------------------
CASH PROVIDED BY OPERATIONS 405.8 376.8
-------------------------------------------------------------------------------
INVESTING ACTIVITIES
Property and equipment expenditures (347.7) (260.2)
Purchases and sales of restaurant
businesses and sales of other property 8.1 8.0
Other (8.1) (4.7)
-------------------------------------------------------------------------------
CASH USED FOR INVESTING ACTIVITIES (347.7) (256.9)
-------------------------------------------------------------------------------
FINANCING ACTIVITIES
Notes payable and long-term
financing issuances and repayments 10.1 (73.4)
Treasury stock purchases (6.9) (27.9)
Common and preferred stock dividends (54.6) (50.8)
Other 11.6 14.5
-------------------------------------------------------------------------------
CASH USED FOR FINANCING ACTIVITIES (39.8) (137.6)
-------------------------------------------------------------------------------
CASH AND EQUIVALENTS INCREASE
(DECREASE) 18.3 (17.7)
-------------------------------------------------------------------------------
Cash and equivalents at beginning of
period 179.9 185.8
-------------------------------------------------------------------------------
CASH AND EQUIVALENTS AT END OF PERIOD $198.2 $168.1
===============================================================================
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 $11.9 and $11.8 million
for the first quarters of 1995 and 1994, respectively. Adjusted net
income was divided by the weighted average shares of common stock
outstanding: 694.3 and 707.5 million for the first quarters ended
March 31, 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. At December 31, 1994, the $56.2 million exercise price of these
options was classified in common equity put options, and the related
offset was recorded in common stock in treasury, net of premiums
received.
LINE OF CREDIT AGREEMENT
Effective April 19, 1995, the Company cancelled its existing $700.0
million line of credit agreement, which remained unused at March 31,
1995, 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. The
new five-year agreement provides for fees of .07% per annum on the
total commitment and expires April 19, 2000.<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 First Quarter
per common share data) Ended March 31
-------------------------------------------------------------------------
<S> <C> <C>
SYSTEMWIDE SALES $962.4 17%
-------------------------------------------------------------------------
REVENUES
Sales by Company-operated
restaurants $266.9 21%
Revenues from franchised
restaurants 98.4 18
-------------------------------------------------------------------------
TOTAL REVENUES 365.3 20
-------------------------------------------------------------------------
OPERATING COSTS AND EXPENSES
Company-operated restaurants 215.8 21
Franchised restaurants-
occupancy costs 17.8 18
General, administrative
and selling expenses 35.9 15
Other operating (income)
expense-net 8.2 (40)
-------------------------------------------------------------------------
TOTAL OPERATING COSTS
AND EXPENSES 277.7 21
-------------------------------------------------------------------------
OPERATING INCOME 87.6 19
-------------------------------------------------------------------------
Interest expense 9.2 13
Nonoperating income
(expense)-net (20.7) NM
-------------------------------------------------------------------------
INCOME BEFORE PROVISION FOR
INCOME TAXES 57.7 15
-------------------------------------------------------------------------
Provision for income taxes 20.4 15
-------------------------------------------------------------------------
NET INCOME $37.3 15%
=========================================================================
NET INCOME PER COMMON SHARE $ .06 18%
-------------------------------------------------------------------------
NM - Not Meaningful
/TABLE
<PAGE>
<PAGE> 8
CONSOLIDATED OPERATING RESULTS
Net income and net income per common share increased 15 and 18%,
respectively. The three percentage point spread between the increases
in net income and net income per common share reflected the impact of
share repurchase. The Company has repurchased about $500 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 increase was due to
expansion and higher sales at existing locations worldwide, aided by
stronger foreign currencies.
-----------------------------------------------------------------------
LOCATIONS Quarters ended March 31
1995 1994
-----------------------------------------------------------------------
RESTAURANT ADDITIONS
U.S. 51 40
Outside of the U.S. 114 85
-----------------------------------------------------------------------
Total restaurant additions 165 125
-----------------------------------------------------------------------
Total satellite additions 138 71
-----------------------------------------------------------------------
UNDER CONSTRUCTION
U.S. 99 107
Outside of the U.S. 228 128
-----------------------------------------------------------------------
Total restaurants 327 235
-----------------------------------------------------------------------
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 revenue increase reflected
strong worldwide operating results.
-----------------------------------------------------------------------
CONSOLIDATED MARGINS Quarters ended March 31
1995 1994
-----------------------------------------------------------------------
As a percent of sales/revenues
Franchised 81.8 81.8
Company-operated 18.4 18.3
-----------------------------------------------------------------------
In millions of dollars
Franchised $531.5 $450.9
Company-operated 278.4 227.3
-----------------------------------------------------------------------
Franchised margin dollars comprised about two-thirds of the
combined operating margins, the same as in the prior year. Company-
operated margins as a percent of sales improved slightly; as a percent
of sales, food and paper and payroll costs increased, while occupancy
and other operating costs declined.<PAGE>
<PAGE> 9
The increase in general, administrative and selling expenses was
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 other
category in 1995 included higher provisions for property dispositions.
------------------------------------------------------------------------
OTHER OPERATING TRANSACTIONS Quarters ended March 31
In millions of dollars 1995 1994
------------------------------------------------------------------------
Gains on sales of restaurant businesses $(11.9) $(17.4)
Equity in earnings of unconsolidated
affiliates (19.2) (10.9)
Other 18.9 7.9
------------------------------------------------------------------------
Other operating (income) expense-net $(12.2) $(20.4)
========================================================================
The increase in consolidated operating income primarily reflected
higher combined operating margins and stronger foreign currencies,
partially offset by higher general, administrative and selling
expenses.
Interest expense increased due to higher debt levels and stronger
foreign currencies, partially offset by lower average interest rates.
Nonoperating income (expense) was impacted by higher losses on
investments and higher minority interest charges.
The effective income tax rate was 35.5% in the first quarters of
1995 and 1994, compared to 35.1% for the year 1994.
U.S. OPERATING RESULTS
U.S. sales grew due to expansion and higher sales at existing
restaurants. Positive comparable sales were achieved in both 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 program. Additionally in this quarter, programs such as
95 cents Big Mac/Egg McMuffin in January, 95 cents Double
Cheeseburger/Sausage McMuffin with Egg in February, as well as 99 cents
Bacon Double Cheeseburger/Bacon, Egg & Cheese Biscuit and Bacon Cheddar
LT as Taste of the Month in March, generated incremental transactions.
-----------------------------------------------------------------------
U.S. OPERATING RESULTS Quarters ended March 31
1995 1994
-----------------------------------------------------------------------
Percent increase
Sales 8 6
Revenues 9 6
Operating income 4 5
-----------------------------------------------------------------------
As a percent of sales/revenues
Company-operated margins 16.3 17.7
Franchised margins 82.4 82.2
-----------------------------------------------------------------------<PAGE>
<PAGE> 10
The increase in U.S. operating income was driven by higher
franchised margin dollars, partially offset by higher general,
administrative and selling expenses. Company-operated margin dollars
were relatively flat; the decline as a percent of sales resulted from
higher food and payroll costs associated with the programs described
above. The improvements in franchised margin dollars and as a percent
of revenues were due to sales growth.
OPERATING RESULTS OUTSIDE OF THE U.S.
Sales outside of the U.S. rose due to expansion, stronger foreign
currencies and higher sales at existing restaurants. Comparable sales
on a local currency basis were positive in both periods of 1995 and
1994.
-----------------------------------------------------------------------
OPERATING RESULTS Quarters ended March 31
OUTSIDE OF THE U.S. 1995 1994
-----------------------------------------------------------------------
Percent increase
Sales 30 14
Revenues 33 12
Operating income 38 19
-----------------------------------------------------------------------
As a percent of sales/revenues
Company-operated margins 19.9 18.8
Franchised margins 81.0 81.0
-----------------------------------------------------------------------
All geographic segments reported excellent gains in operating
results. Noteworthy achievements were evident in Canada; Australia,
Singapore, Taiwan and Japan in Asia/Pacific; France, Germany, England,
the Netherlands and Switzerland in Europe/Africa/Middle East; and
Brazil in Latin America. Transactions, sales and profits have improved
notably in Japan in this quarter. Results in Mexico continued to be
impacted by the economy and currency devaluation; however, we believe
this market offers long-term potential for McDonald's.
The increase in operating income outside of the U.S. resulted from
expansion, 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
improvement in franchised margin dollars reflected better sales and
stronger foreign currencies.<PAGE>
<PAGE> 11
IMPACT OF FOREIGN CURRENCIES ON REPORTED RESULTS
The Deutsche Mark, French Franc, British Pound Sterling, Australian
Dollar and Japanese Yen represented the foreign currencies which
significantly contributed to the impact on reported results for the
first quarter of 1995. If exchange rates had remained at 1994 levels,
reported results would have been as follows:
---------------------------------------------------------------
FOREIGN CURRENCY IMPACT Quarter ended March 31, 1995
Dollars in millions Reported Adjusted
---------------------------------------------------------------
Systemwide sales $6,671.6 17% $6,431.4 13%
Operating income 546.7 19 522.1 14
Net income 280.7 15 271.0 11
---------------------------------------------------------------
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 selectively hedging foreign-denominated cash flows.
FINANCIAL POSITION
Cash provided by operations for the first quarter increased 8% and was
affected by a significant reduction of current liabilities. Together
with other sources of cash such as borrowings, cash provided by
operations was used primarily for capital expenditures and dividends.
In connection with accelerated expansion, U.S. capital expenditures
increased 27% and capital expenditures outside of the U.S. increased
39% in the first quarter.<PAGE>
<PAGE> 12
<TABLE>
FIRST QUARTER HIGHLIGHTS
<CAPTION>
OPERATING RESULTS
-------------------------------------------------------------------------
Dollars in millions, except Quarters Ended
per common share data March 31
1995 1994
-------------------------------------------------------------------------
<S> <C> <C>
Systemwide sales $6,671.6 $5,709.2
-------------------------------------------------------------------------
U.S. sales $3,604.6 $3,346.4
Operated by franchisees 2,836.0 2,684.9
Operated by the Company 622.3 575.3
Operated by affiliates 146.3 86.2
-------------------------------------------------------------------------
Sales outside of the U.S. $3,067.0 $2,362.8
Operated by franchisees 1,450.0 1,108.1
Operated by the Company 889.3 669.4
Operated by affiliates 727.7 585.3
-------------------------------------------------------------------------
Total revenues $2,161.3 1,796.0
U.S. 1,013.9 933.0
Outside of the U.S. 1,147.4 863.0
-------------------------------------------------------------------------
Operating income* $ 546.7 $ 459.1
U.S. 269.4 260.0
Outside of the U.S. 288.1 209.4
Corporate (10.8) (10.3)
-------------------------------------------------------------------------
Income before provision for
income taxes $ 435.1 $ 377.4
Net income 280.7 243.4
Net income per common share .39 .33
-------------------------------------------------------------------------
Cash provided by operations $ 405.8 $ 376.8
-------------------------------------------------------------------------
* 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 March 31, 1995 1994
-------------------------------------------------------------------------
<S> <C> <C>
Systemwide restaurants 15,370 14,118
-------------------------------------------------------------------------
U.S. restaurants 9,795 9,323
Operated by franchisees 7,813 7,628
Operated by the Company 1,563 1,458
Operated by affiliates 419 237
-------------------------------------------------------------------------
Restaurants outside of the U.S. 5,575 4,795
Operated by franchisees 2,664 2,258
Operated by the Company 1,580 1,283
Operated by affiliates 1,331 1,254
-------------------------------------------------------------------------
/TABLE
<PAGE>
<PAGE> 14
PART II
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 March 31, 1991.<PAGE>
<PAGE> 15
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.
(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.<PAGE>
<PAGE> 16
Exhibit Number Description
-------------- -----------
(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.
(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.
(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.*<PAGE>
<PAGE> 17
Exhibit Number Description
-------------- -----------
(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, as
amended and restated, incorporated herein by reference
from Form 10-K for the year ended December 31, 1994.*
(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 first quarter
covered by this report, and subsequently up to May 12, 1995.<PAGE>
<PAGE> 18
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 12, 1995
----------------
(Date)<PAGE>
<PAGE> 19
<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,
1995 1994
---- ----
<S> <C> <C>
Net Income (A) $280.7 $243.4
Preferred stock dividends (net of tax) (11.9) (11.8)
------- -------
Net income available after preferred stock dividends 268.8 231.6
Common stock dividends on assumed conversion of preferred stock 0.4 0.3
------- -------
Net income available to common shareholders $269.2 $231.9
======= =======
Weighted average number of common shares outstanding during the period (A) 694.3 707.5
Additional shares related to potentially dilutive securities 22.8 21.9
------- -------
Adjusted weighted average common shares 717.1 729.4
======= =======
Fully diluted net income per common share $ 0.38 $ 0.32
------- -------
---------------------
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>
<PAGE> 20
<TABLE> Exhibit 12
McDONALD'S CORPORATION
STATEMENT RE: COMPUTATION OF RATIOS
(Dollars in Millions)
<CAPTION> Quarters
Ended March 31, 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 $435.1 $377.4 $1,886.6 $1,675.7 $1,448.1 $1,299.4 $1,246.3
- Minority interest in operating results of
majority-owned subsidiaries, less equity in
undistributed operating results of
less-than-50% owned affiliates 3.9 (0.1) 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 18.6 8.7 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* 24.5 18.1 83.4 71.6 70.1 67.9 59.0
- Interest expense, amortization of debt
discount and issuance costs, and
depreciation of capitalized interest* 91.8 82.4 346.0 358.0 413.8 433.9 411.9
---------------------------------------------------------------------------
$573.9 $486.5 $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* $24.5 $18.1 $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* 94.3 81.5 343.9 349.3 405.4 425.7 403.4
- Capitalized interest* 4.5 3.9 21.0 20.7 20.5 28.5 38.9
---------------------------------------------------------------------------
$123.3 $103.5 $448.3 $441.6 $496.0 $522.1 $501.3
===========================================================================
RATIO OF EARNINGS TO FIXED CHARGES 4.66 4.70 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.
/TABLE
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 198
<SECURITIES> 0
<RECEIVABLES> 351
<ALLOWANCES> 0
<INVENTORY> 52
<CURRENT-ASSETS> 740
<PP&E> 15,895
<DEPRECIATION> 4,048
<TOTAL-ASSETS> 14,214
<CURRENT-LIABILITIES> 1,559
<BONDS> 3,986
<COMMON> 92
0
673
<OTHER-SE> 6,481
<TOTAL-LIABILITY-AND-EQUITY> 14,214
<SALES> 1,512
<TOTAL-REVENUES> 2,161
<CGS> 1,233
<TOTAL-COSTS> 1,351
<OTHER-EXPENSES> 263
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 81
<INCOME-PRETAX> 435
<INCOME-TAX> 154
<INCOME-CONTINUING> 281
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 281
<EPS-PRIMARY> .39
<EPS-DILUTED> 0
</TABLE>
