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): July 14, 1998
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)
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Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
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(c) Exhibits
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(99) Press Release dated July 14, 1998 -- McDonald's Announces
Productivity Study 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
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Gloria Santona
Vice President, Deputy General Counsel
and Secretary
EXHIBIT 99
Investor Press Release
FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
7/14/98 Mary Healy, Investors 630-623-6429
Chuck Ebeling, Media 630-623-6150
McDONALD'S ANNOUNCES PRODUCTIVITY STUDY RESULTS
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OAK BROOK, IL --Today, McDonald's Corporation announced the complete
results of its home office productivity initiative designed to improve
staff alignment, focus and productivity, and reduce ongoing selling,
general and administrative expenses.
As a result of this initiative, the Company expects to reduce home
office staffing by about 23 percent or approximately 525 positions,
consolidate certain home office facilities and reduce other expenditures
in a variety of areas over the next 18 months. These efficiencies have
been identified through a combination of better alignment and
coordination with our recently reorganized U.S. field organization,
processing and communication efficiencies made possible by enhanced
technology, and the outsourcing of certain business processes.
When these changes are fully implemented, the Company expects to
save about $100 million of selling, general & administrative expenses per
year. Approximately two-thirds of the savings are expected to be
realized in 1999 with the full amount of annualized savings being
realized in 2000.
McDonald's President and CEO-elect, Jack M. Greenberg said, ``The
changes we are making are significant in scope and impact. They are part
of an ongoing process designed to make McDonald's more focused,
competitive, productive and innovative. We believe these changes will
strengthen our position as the World's Best Fast Food Restaurant
Experience and be good for our customers, owner/operators, suppliers,
employees and shareholders.''
The Company will incur a special pre-tax charge of $160 million in
the second quarter 1998 for employee severance and outplacement,
consolidation of facilities and other costs in connection with the home
office productivity initiative.
Previously, the Company announced plans to introduce a `Made for
You' food preparation system in the United States and Canada, and to
provide financial incentives to McDonald's owner/operators to defray the
cost of equipment made obsolete as a result of conversion to this new
system. At that time, the Company stated it expected to take a pre-tax
charge of $170-$190 million related to the introduction of the `Made for
You' system.
As a result of both the `Made for You' and productivity initiatives,
the Company will incur a special pre-tax charge totaling $350 million in
the second quarter 1998 including $190 million related to `Made for You'.
The total reduction of net income and earnings per share is expected to
be $235 million and $.33, respectively. The announcement of second
quarter earnings will be July 20, 1998.
McDonald's is the largest and best-known global foodservice
retailer, with more than 23,300 restaurants in 111 countries.
Forward-Looking Statements
Certain forward-looking statements are included in this release. 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 the success of business and
operating initiatives including those discussed in this release; and
changes in business and economic conditions; consumer preferences,
spending patterns and demographic trends; accounting policies and
practices and legislation and governmental regulation.
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