SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 17, 1997
McDONALD'S CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware 1-5231 36-2361282
(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
One McDonald's Plaza
Oak Brook, Illinois 60523
(630) 623-3000
(Address and Phone Number of Principal Executive Offices)<PAGE>
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibit
------ -----------------------------------------------------------------
(c) Exhibit
-------
(99) Press Release dated October 17, 1997 -- McDonald's Reports
Global Results
<PAGE>
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 hereunto duly authorized.
McDONALD'S CORPORATION
(Registrant)
By: /s/ Gloria Santona
--------------------------------------
Gloria Santona
Vice President, Deputy General Counsel
and Secretary
Investor Release
FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
10/17/97 Investors: Mary Healy, 630-623-6429
Media: Chuck Ebeling, 630-623-6150
McDONALD'S REPORTS GLOBAL RESULTS
OAK BROOK, IL -- McDonald's Corporation today announced record results
for the nine months and quarter ended September 30, 1997 despite the
negative effect of foreign currency translation:
- Net income per common share rose 8% for the nine months and 3% for
the quarter, or 11% and 8%, respectively, in constant currencies.
- Net income grew 6% for the nine months and 2% for the quarter, or 9% -
and 6%, respectively, in constant currencies.
- Systemwide sales increased 11% for the nine months and quarter in
constant currencies.
- Operating income outside the U.S. contributed 63% to consolidated
operating income and increased 14% for the quarter in constant
currencies.
- The Company added 1,224 restaurants in the first nine months, or one
every five hours. About 85% were outside the U.S.
- The Company repurchased $575 million of common stock during the
first nine months of 1997.
Key highlights
Dollars in millions, except Nine months ended September 30
per common share data ------------------------------------
1997 1996 Increase
--------- -------- --------------
- Systemwide sales $25,107.9 $23,527.6 $1,580.3 7%
- Total revenues 8,456.2 7,864.9 591.3 8
- Operating income 2,113.1 2,018.6 94.5 5
- Net income 1,231.6 1,162.6 69.0 6
- Net income per common share 1.76 1.63 .13 8
Quarters ended September 30
------------------------------------
1997 1996 Increase
--------- -------- --------------
- Systemwide sales $ 8,779.7 $ 8,286.1 $ 513.6 6%
- Total revenues 3,006.0 2,773.8 232.2 8
- Operating income 755.4 744.0 11.4 2
- Net income 448.9 440.6 8.3 2
- Net income per common share .64 .62 .02 3
SUMMARY COMMENTARY
Chairman and Chief Executive Officer Michael R. Quinlan said, "Throughout
1997, the strong U.S. dollar has negatively affected McDonald's reported
results, and we expect this trend to continue during the fourth quarter.
Excluding the effect of foreign currency translation, systemwide sales
increased 11 percent for the nine months and quarter, while net income
per common share increased 11 percent for the nine months and eight
percent for the quarter. While currency fluctuations are a reality of
being a global business, we must concentrate on those areas that we can
directly influence. So, we will continue to focus on satisfying
customers and outdistancing the competition in quality, service,
cleanliness and value.
"Our global market share is second to none in the quick-service
restaurant category, and we continue to widen our lead in many markets,
including the U.S. We will continue to invest globally where we are
confident in the long-term prospects, while considering current returns
and economic and competitive conditions. In the U.S., we have slowed
expansion, resulting in a larger proportion of capital being invested
outside the U.S. where the opportunities are greatest. To put this in
perspective, some competitors talk of adding hundreds of units outside
the U.S. over the next five years; on the other hand, we already have
10,000 restaurants and continue to add nearly 2,000 a year outside the
U.S.
"The McDonald's brand is a tremendous asset and we'll continue to
capitalize on it as we expand market share through our well-established
global infrastructure. After further refinement of our plans, we expect
to add about 2,100 restaurants this year. About 85 percent of our
additions will be outside the U.S."
Jim Cantalupo, President and Chief Executive Officer-International,
said, "International sales were strong in the third quarter with a 16
percent constant currency sales increase despite a lower than expected
increase in comparable sales. I believe comparable sales were affected
by issues that are cyclical in nature and not fundamental. Evidence of
this can be seen in France, where despite a difficult economy, we have
seen improved results in the second and third quarters while Burger King
decided to leave the market. Near term, our challenge is to increase
comparable sales in the face of weak economies while continuing to expand
rapidly in order to solidify our dominant market position around the
world."
Jack Greenberg, Vice Chairman, Chairman and Chief Executive Officer-
USA, said, "I am encouraged by the U.S. sales increases this quarter and
year-to-date. Nevertheless, sales results have been mixed throughout the
year and I am cautious about our ability to continue this momentum in the
fourth quarter. Also, I am not satisfied with the operating income
results. Longer term, I believe that profitable growth is achievable
despite an extremely competitive U.S. environment. We will continue to
focus on achieving higher levels of customer satisfaction through value
and an emphasis on food that is fresher, service that is faster and
restaurants that are cleaner. We are encouraged by early results of some
initiatives in the areas of drive-thru and production systems and plan to
broaden these initiatives in the future. And we are also off to a good
start in communicating more effectively with our customers through a new
advertising campaign, Did Somebody Say McDonald's?"
CONSOLIDATED OPERATING RESULTS
Net income per common share and net income increased eight and six
percent, respectively, for the nine months, and three and two percent,
respectively, for the quarter. Changing foreign currencies significantly
reduced reported results for the nine months and quarter. Excluding the
$16 million non-cash charge for the adoption of SFAS 121 in first quarter
1996 and the foreign currency translation effect, net income per common
share and net income would have increased ten and eight percent,
respectively, for the nine months. For the quarter, net income per
common share and net income would have increased eight and six percent,
respectively, excluding the negative foreign currency translation effect.
During the quarter, the Company repurchased 1.5 million shares of
common stock for approximately $75 million, bringing total share
repurchase for the nine months to 12.2 million shares for about $575
million. Fewer shares outstanding resulted in higher increases in net
income per common share compared with the increases in net income.
Systemwide sales represent sales by Company-operated, franchised and
affiliated restaurants. Total revenues consist of sales by Company-
operated restaurants and fees from restaurants operated by franchisees
and affiliates. These fees are based upon a percent of sales with
specified minimum payments. On a global basis, the increases in sales
and revenues for both periods were primarily due to expansion, offset in
part by weaker foreign currencies.
The lower number of restaurant additions for the nine months was
primarily due to the previously announced satellite restaurant closings
in the U.S. and fewer satellite additions outside the U.S.
Restaurant additions Nine months Quarters
ended September 30 ended September 30
--------------------------------------
1997 1996 1997 1996
---- ---- ---- ----
U.S. 155 484 71 171
Outside of the U.S. 1,069 1,127 392 557
Total restaurant additions 1,224 1,611 463 728
Restaurants under construction At September 30
1997 1996
---- ----
U.S. 128 191
Outside of the U.S. 438 396
Total restaurants under construction 566 587
Company-operated margins as a percent of sales decreased for the
nine months and for the quarter. For both periods, food & paper costs
and occupancy & other operating costs increased as a percent of sales,
while payroll costs decreased.
Franchised margin dollars comprised about two-thirds of the combined
operating margins, the same as in the prior year. While franchised
margins as a percent of applicable revenues decreased for both periods,
franchised margin dollars increased five percent for the nine months and
four percent for the quarter.
Consolidated operating margins Nine months Quarters
ended September 30 ended September 30
----------------------------------------
1997 1996 1997 1996
In millions of dollars ---- ---- ---- ----
Company-operated $1,102.5 $1,040.7 $402.4 $383.5
Franchised 1,977.1 1,879.6 693.6 666.0
Combined operating margins $3,079.6 $2,920.3 $1,096.0 $1,049.5
As a percent of sales/revenues
Company-operated 18.3 18.7 18.6 19.5
Franchised 81.3 81.7 81.8 82.4
The increases in general, administrative & selling expenses were
primarily due to strategic global spending to support the Convenience,
Value and Execution Strategies, including costs associated with expansion
outside the U.S. and continued investment in developing countries, offset
in part by weaker foreign currencies. In addition, the quarter included
incremental U.S. marketing costs, which are also expected to affect the
fourth quarter.
Other operating (income) expense--net is composed of transactions
related to franchising and the foodservice business. Gains on sales of
restaurant businesses were lower since fewer were sold. The other
category reflected lower expense for the nine months and slightly
increased expense for the quarter. The lower expense for the nine months
was primarily due to the $16 million charge for the adoption of SFAS 121
in first quarter 1996, and lower provisions for property dispositions in
1997
Other operating (income) expense--net Nine months Quarters
ended September 30 ended September 30
--------------------------------------
1997 1996 1997 1996
In millions of dollars ---- ---- ---- ----
Gains on sales of restaurant businesses $(37.1) $(57.1) $(9.5) $(14.8)
Equity in earnings of unconsolidated
affiliates (59.5) (60.8) (26.3) (26.4)
Other (income) expense 6.4 34.2 (0.9) (1.2)
Other operating (income) expense--net $(90.2) $(83.7) $(34.9) $(42.4)
Consolidated operating income increased $94.5 million or five
percent and $11.4 million or two percent for the nine months and quarter,
respectively. The increases reflected higher combined operating margin
dollars for both periods and higher other operating income for the nine
months, offset in part by higher general, administrative & selling
expenses and weaker foreign currencies in both periods.
Higher interest expense in both periods reflected higher debt
levels, offset in part by lower average interest rates and weaker foreign
currencies. Contributing to the increase in debt levels was about $375
million of borrowings during the quarter to fund the retirement of
preferred stock issued by a foreign subsidiary.
Nonoperating (income) expense--net reflected lower charges for
minority interests in both periods of 1997, and for the nine months ended
September 30, 1996, losses associated with the reduction of the carrying
value of the Company's investment in Discovery Zone common stock to zero.
In addition, translation gains were lower for the nine months and higher
for the quarter.
The effective income tax rate was 32.3 and 31.9 percent for the nine
months and quarter of 1997, respectively, compared with 32.7 and 32.2
percent for the corresponding periods of 1996. For the year 1997, the
Company expects the effective tax rate to be about 32.0 percent.
OPERATING RESULTS OUTSIDE THE U.S.
The sales increases outside the U.S. for both periods were driven
primarily by expansion, offset in part by weaker foreign currencies.
Comparable sales in constant currencies were slightly negative for the
nine months and slightly positive for the quarter. If exchange rates had
remained at 1996 levels, sales outside the U.S. would have increased 16
percent for both periods. Severe weather in Europe in the first quarter
and Asia/Pacific in the third quarter, along with weak economies in some
of our major markets, negatively affected results.
Operating results outside the U.S. Nine months Quarters
ended September 30 ended September 30
--------------------------------------
1997 1996 1997 1996
---- ---- ---- ----
Percent increase
Sales
As reported 8 10 6 9
Excluding foreign currency translation 16 15 16 14
Revenues
As reported 13 14 13 13
Excluding foreign currency translation 19 17 21 15
Operating income
As reported 9 9 5 11
Excluding foreign currency translation 16 12 14 14
Excluding SFAS 121 charge and
foreign currency translation 14 13 14 14
As a percent of sales/revenues
Company-operated margins 19.2 19.8 19.9 21.0
Franchised margins 81.6 81.7 82.2 82.8
Revenues increased at a faster rate than sales in both periods. This
was primarily due to the weakening Japanese Yen, which had a greater
effect on sales than revenues due to our affiliate structure in Japan, and
the higher growth rate in Company-operated versus franchised restaurants.
Of the larger international markets, the following had strong sales
and operating income growth on a constant currency basis for both periods
of 1997: the Philippines and Taiwan in Asia/Pacific; England, Italy,
Spain, and Sweden in Europe; and Argentina, Brazil and Mexico in Latin
America. Our operations in Canada were negatively affected by increased
competition and low consumer spending due to high unemployment; weak
economies also negatively affected our operations in France and Germany,
although France showed improvement in the second and third quarters.
The increases in operating income outside the U.S. were driven by
higher Company-operated and franchised margin dollars, for both periods,
and an increase in other operating income for the nine months. Higher
general, administrative & selling expenses, associated with expansion and
continued investment in developing countries, and weaker foreign
currencies partially offset these increases.
Company-operated margins as a percent of sales declined in both
periods. As a percent of sales, increases in food & paper costs and
occupancy & other operating costs in both periods were offset in part by
decreases in payroll costs.
Franchised margins as a percent of revenues were relatively flat for
the nine months and decreased for the quarter.
IMPACT OF FOREIGN CURRENCIES ON REPORTED RESULTS
While changing foreign currencies affect reported results, McDonald's
lessens exposures by financing in local currencies, hedging certain
foreign-denominated cash flows and, where practical, by purchasing goods
and services in local currencies.
The weakening Japanese Yen, Deutsche Mark and French Franc were the
primary foreign currencies that negatively affected reported results in
both periods. The following table presents the 1997 results translated
at 1996 rates compared with reported results.
Foreign currency translation effect on worldwide results
Dollars in millions, except Increase
per common share data Adjusted Reported Change Adjusted Reported
-------- -------- ---------- -------- --------
Nine months ended September 30, 1997
Systemwide sales $26,016.7 $25,107.9 $908.8 11% 7%
Operating income 2,189.8 2,113.1 76.7 8 5
Net income 1,269.2 1,231.6 37.6 9 6
Net income per common
share 1.81 1.76 .05 11 8
Quarter ended September 30, 1997
Systemwide sales $9,206.3 $8,799.7 $406.6 11% 6%
Operating income 794.5 755.4 39.1 7 2
Net income 465.4 448.9 16.5 6 2
Net income per common
share .67 .64 .03 8 3
U.S. OPERATING RESULTS
U.S. sales increased in both periods primarily due to restaurant expansion
(397) restaurants were added in the 12 months ended September 30, 1997).
U.S. comparable sales were positive for both periods. This performance
reflected successful marketing and promotions including Monopoly, Chicken
McNuggets, Teenie Beanie Babies and Hercules and disappointing results
from the price component of Campaign 55.
U.S. operating results Nine months Quarters
ended September 30 ended September 30
--------------------------------------
1997 1996 1997 1996
---- ---- ---- ----
Percent increase/(decrease)
Sales 5 3 6 2
Revenues 1 3 2 1
Operating income - (3) (2) (5)
As a percent of sales/revenues
Company-operated margins 16.6 16.8 15.9 16.8
Franchised margins 81.2 81.7 81.6 82.1
U.S. sales increased at a faster rate than revenues primarily
because the number of U.S. Company-operated restaurants decreased over
the past year, while the number of franchised and affiliated restaurants
increased.
U.S. operating income was flat for the nine months and decreased for
the quarter. In both periods, this performance reflected lower Company-
operated margin dollars, higher general, administrative & selling
expenses, and lower other operating income, offset in part by higher
franchised margin dollars.
Company-operated margins as a percent of sales declined for both
periods. Cost trends as a percent of sales follow: food & paper costs
increased for both periods and occupancy & other operating expenses
decreased for both periods, while payroll decreased for the nine months
and remained flat for the quarter.
Franchised margins as a percent of revenues declined for both
periods. These declines reflected slower revenue growth as a result of
decreased initial franchise fees driven by fewer openings, and rent
adjustments, partially offset by positive comparable sales. The margins
were also negatively affected by higher occupancy costs, primarily rent
expense, driven by an increase in the number of leased sites.
FORWARD-LOOKING STATEMENTS
Certain forward-looking statements are included in this report. They use
such words as "may," "will," "expect," "believe," "plan" and other
similar terminology. These statements reflect management's current
expectations and involve a number of risks and uncertainties. Actual
results could differ materially due to changes in global and local
business and economic conditions; legislation and governmental
regulation; competition; success of operating initiatives and advertising
and promotional efforts; food, labor and other operating costs;
availability and cost of land and construction; accounting policies and
practices; consumer preferences, spending patterns and demographic
trends; political or economic instability in local markets; and currency
exchange rates.
McDONALD'S CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Dollars and shares in millions, Nine months ended September 30
except per common share data ----------------------------------------
Increase/(Decrease)
-------------------
1997 1996 Dollars Percent
---- ---- ------ ------
SYSTEMWIDE SALES $25,107.9 $23,527.6 1,580.3 7
Revenues
Sales by Company-operated
restaurants $ 6,025.8 $ 5,565.2 460.6 8
Revenues from franchised and
affiliated restaurants 2,430.4 2,299.7 130.7 6
TOTAL REVENUES 8,456.2 7,864.9 591.3 8
Operating costs and expenses
Company-operated restaurants 4,923.3 4,524.5 398.8 9
Franchised restaurants--occupancy costs 453.3 420.1 33.2 8
General, administrative and selling
expenses 1,056.7 985.4 71.3 7
Other operating (income)
expense--net(1) (90.2) (83.7) (6.5) n/m
Total operating costs
and expenses(1) 6,343.1 5,846.3 496.8 8
OPERATING INCOME(1) 2,113.1 2,018.6 94.5 5
Interest expense 270.3 252.3 18.0 7
Nonoperating (income) expense--net 24.9 38.8 (13.9) n/m
Income before provision for
income taxes(1) 1,817.9 1,727.5 90.4 5
Provision for income taxes 586.3 564.9 21.4 4
NET INCOME(1) $ 1,231.6 $ 1,162.6 69.0 6
=============================================================================
NET INCOME PER COMMON SHARE(1)(2) $ 1.76 $ 1.63 0.13 8
Weighted average common shares
outstanding 689.9 699.1
Dollars and shares in millions, Quarters ended September 30
except per common share data --------------------------------------
Increase/(Decrease)
-------------------
1997 1996 Dollars Percent
---- ---- ------ ------
SYSTEMWIDE SALES $8,799.7 $8,286.1 513.6 6
Revenues
Sales by Company-operated
restaurants $2,158.5 $1,965.6 192.9 10
Revenues from franchised and
affiliated restaurants 847.5 808.2 39.3 5
TOTAL REVENUES 3,006.0 2,773.8 232.2 8
Operating costs and expenses
Company-operated restaurants 1,756.1 1,582.1 174.0 11
Franchised restaurants--occupancy costs 153.9 142.2 11.7 8
General, administrative and selling
expenses 375.5 347.9 27.6 8
Other operating (income) expense--net(1) (34.9) (42.4) 7.5 n/m
Total operating costs and
expenses(1) 2,250.6 2,029.8 220.8 11
OPERATING INCOME(1) 755.4 744.0 11.4 2
Interest expense 94.1 84.7 9.4 11
Nonoperating (income) expense--net 2.2 9.4 (7.2) n/m
Income before provision for
income taxes(1) 659.1 649.9 9.2 1
Provision for income taxes 210.2 209.3 0.9 0
NET INCOME(1) $ 448.9 $ 440.6 8.3 2
=============================================================================
NET INCOME PER COMMON SHARE(1)(2) $ 0.64 $ 0.62 0.02 3
Weighted average common shares
outstanding 688.5 697.8
(1) Includes the $16 million charge for the adoption of SFAS 121 for the
nine months ended September 30, 1996.
(2) Computed using net income reduced by preferred stock dividends of
$20.7 million for the nine months of 1997 and 1996 and $6.9 million for the
third quarters of 1997 and 1996.
n/m Not meaningful
McDONALD'S CORPORATION
FINANCIAL INFORMATION
Nine months ended September 30
------------------------------------------
Dollars in millions Increase/(Decrease)
------------------
1997 1996 Dollars Percent
----- ----- ----- -----
SYSTEMWIDE SALES
----------------
U.S.
----
Operated by franchisees $ 9,965.0 $ 9,422.6 542.4 6
Operated by the Company 2,029.4 2,085.2 (55.8) (3)
Operated by affiliates 586.8 676.9 179.9 27
--------- --------- ------- --
12,851.2 12,184.7 666.5 5
--------- --------- ------- --
Outside of the U.S.
-------------------
Operated by franchisees 5,627.7 5,402.3 225.4 4
Operated by the Company 3,996.4 3,480.0 516.4 15
Operated by affiliates 2,632.6 2,460.6 172.0 7
--------- --------- ------- --
12,256.7 11,342.9 913.8 8
--------- --------- ------- --
$25,107.9 $23,527.6 1,580.3 7
========= ========= ======== ===
By Type
-------
Operated by franchisees $15,592.7 $14,824.9 767.8 5
Operated by the Company 6,025.8 5,565.2 460.6 8
Operated by affiliates 3,489.4 3,137.5 351.9 11
--------- --------- ------- --
$25,107.9 $23,527.6 1,580.3 7
========= ========= ======== ===
---------------------------------------------------------------------------
TOTAL REVENUES
U.S. $ 3,453.7 $ 3,432.5 21.2 1
Outside of the U.S. 5,002.5 4,432.4 570.1 13
--------- --------- ------- --
$ 8,456.2 $ 7,864.9 591.3 8
========= ========= ======= ===
---------------------------------------------------------------------------
OPERATING INCOME
U.S. $ 924.8 $ 926.4 (1.6) 0
Outside of the U.S. 1,233.5 1,131.1 102.4 9
Corporate G&A (45.2) (38.9) (6.3) (16)
--------- --------- ------- --
$ 2,113.1 $ 2,018.6 94.5 5
========= ========= ======= ===
---------------------------------------------------------------------------
PERCENT CONTRIBUTION TO
CONSOLIDATED MARGINS
Nine months ended September 30
------------------------------
1997 1996
---- ----
Company-operated
----------------
U.S. 30 34
Outside of the U.S. 70 66
--- ---
100 100
=== ===
Franchised
----------
U.S. 58 59
Outside of the U.S. 42 41
--- ---
100 100
=== ===
---------------------------------------------------------------------------
CONSOLIDATED COMPANY-OPERATED MARGINS
AS A PERCENT OF SALES
Food & paper 34.2 33.6
Payroll & other employee benefits 24.9 25.3
Occupancy & other operating expenses 22.6 22.4
---- ----
Total expenses 81.7 81.3
==== ====
Company-operated margins 18.3 18.7
==== ====
----------------------------------------------------------------------------
Quarters ended September 30
------------------------------------------
Dollars in millions Increase/(Decrease)
------------------
1997 1996 Dollars Percent
----- ----- ----- -----
SYSTEMWIDE SALES
----------------
U.S.
----
Operated by franchisees $ 3,448.6 $ 3,232.5 216.1 7
Operated by the Company 692.8 703.7 (10.9) (2)
Operated by affiliates 300.5 246.9 53.6 22
--------- --------- ------- --
4,441.9 4,183.1 258.8 5
--------- --------- ------- --
Outside of the U.S.
-------------------
Operated by franchisees 1,982.2 1,967.1 15.1 1
Operated by the Company 1,465.7 1,261.9 203.8 16
Operated by affiliates 909.9 874.0 35.9 4
--------- --------- ------- --
4,357.8 4,103.0 254.8 6
--------- --------- ------- --
$8,799.7 $8,286.1 513.6 6
========= ========= ======= ===
By Type
-------
Operated by franchisees $ 5,430.8 $ 5,199.6 231.2 4
Operated by the Company 2,158.5 1,965.6 192.9 10
Operated by affiliates 1,210.4 1,120.9 89.5 8
--------- --------- ------- --
$ 8,799.7 $ 8,286.1 513.6 6
========= ========= ======== ===
---------------------------------------------------------------------------
TOTAL REVENUES
U.S. $ 1,191.6 $ 1,168.5 23.1 2
Outside of the U.S. 1,814.4 1,605.3 209.1 13
--------- --------- ------- --
$ 3,006.0 $ 2,773.8 232.2 8
========= ========= ======== ===
---------------------------------------------------------------------------
OPERATING INCOME
U.S. $ 313.4 $ 321.2 (7.8) (2)
Outside of the U.S. 460.6 439.6 21.0 5
Corporate G&A (18.6) (16.8) (1.8) (11)
--------- --------- ------- --
$ 755.4 $ 744.0 11.4 2
========= ========= ======== ===
---------------------------------------------------------------------------
PERCENT CONTRIBUTION TO
CONSOLIDATED MARGINS
Quarters ended September 30
------------------------------
1997 1996
---- ----
Company-operated
----------------
U.S. 27 31
Outside of the U.S. 73 69
--- ---
100 100
=== ===
Franchised
----------
U.S. 59 57
Outside of the U.S. 41 43
--- ---
100 100
=== ===
---------------------------------------------------------------------------
CONSOLIDATED COMPANY-OPERATED MARGINS
AS A PERCENT OF SALES
Food & paper 34.5 33.5
Payroll & other employee benefits 24.5 24.9
Occupancy & other operating expenses 22.4 22.1
---- ----
Total expenses 81.4 80.5
==== ====
Company-operated margins 18.6 19.5
==== ====
---------------------------------------------------------------------------
McDONALD'S CORPORATION
RESTAURANT INFORMATION
At September 30
----------------------------------
1997 1996 Increase/(Decrease)
---- ---- -------------------
U.S.
----
Operated by franchisees 9,600 9,299 301
Operated by the Company 1,796 1,823 (27)
Operated by affiliates 853 730 123
------ ------ -----
12,249 11,852 397
------ ------ -----
Outside the U.S.
-------------------
Operated by franchisees 4,309 3,686 623
Operated by the Company 2,862 2,281 581
Operated by affiliates 2,826 2,172 654
------ ------ -----
9,997 8,139 1,858
------ ------ -----
22,246 19,991 2,255
====== ====== =====
By Type
-------
Operated by franchisees 13,909 12,985 924
Operated by the Company 4,658 4,104 554
Operated by affiliates 3,679 2,902 777
------ ------ -----
22,246 19,991 2,255
====== ====== =====
---------------------------------------------------------------------------
SYSTEMWIDE COUNTRIES 104 94
---------------------------------------------------------------------------
TOTAL RESTAURANTS IN MARKETS OUTSIDE OF THE U.S.
At September 30
----------------------------
1997 1996 Increase
----- ----- --------
Japan 2,241 1,823 418
Canada 1,030 959 71
Germany 802 698 104
England 702 619 83
Australia 633 572 61
France 613 500 113
Brazil 404 271 133
Taiwan 218 147 71
Netherlands 165 138 27
Italy 161 129 32
China 160 91 69
Sweden 145 114 31
Hong Kong 135 114 21
New Zealand 133 112 21
Spain 133 110 23
Philippines 130 94 36
Mexico 124 120 4
Argentina 114 88 26
Puerto Rico 104 86 18
Singapore 104 87 17
Other 1,746 1,267 479
----- ----- ---
9,997 8,139 1,858
===== ===== =====
