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): August 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)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(c) Exhibits
(99) Press Release dated August 14, 1998 -- McDonald's Announces
Timing Change for Accounting Charge
<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/ Michael L. Conley
---------------------------------
Michael L. Conley
Executive Vice President
Chief Financial Officer
Investor Release
FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
08/14/98 Investors: Mary Healy, 630-623-6429
Media: Chuck Ebeling, 630-623-6150
MCDONALD'S ANNOUNCES TIMING CHANGE FOR ACCOUNTING CHARGE
McDonald's Corporation today announced a change in the timing of its
previously announced special charge primarily for financial incentives it
is committed to provide its owner/operators related to its "Made For You"
food preparation system.
"We have been in discussions with the Securities and Exchange
Commission, which reviewed the timing of our accrual of those costs in the
second quarter 1998," said Mike Conley, Executive Vice President and Chief
Financial Officer. "As a result, we have reversed the $190 million pre-tax
special charge related to "Made For You" previously included in second
quarter results. Instead, the charges to earnings for the financial
incentives the Company is committed to provide to owner/operators will be
recorded as payments are made." As described in the table below, net income
per common share, excluding special charges ($0.66 for the second quarter
and $1.18 for the six month period) remain unchanged from the amounts
previously reported in our second quarter earnings release.
"The change in no way affects McDonald's outlook for strong results
and continued positive momentum in our U.S. and international businesses,"
said Conley.
Conley also emphasized that the change does not impact McDonald's
plans to implement the "Made For You" food preparation system throughout
the U.S. and Canada. "We are very pleased that our owner/operators are
embracing the system and expect it will be installed in all of our
restaurants by the end of next year," he said.
Impact of Timing Change on Previously Reported Results
Six Months Ended June 30, 1998 Quarter Ended June 30, 1998
------------------------------ ---------------------------
Dollars in
millions, As As
except per adjusted adjusted
common As excluding As excluding
share previously As special previously As special
data reported* adjusted** charge*** reported* adjusted** charge***
--------- ---------- ---------- --------- ---------- ---------- ---------
Operating $1,104.5 $1,289.5 $1,449.5 $461.8 $646.8 $806.8
Income
Net Income 596.0 719.4 829.4 233.8 357.2 467.2
Net Income .85 1.02 1.18 .33 .50 .66
per common
share -
diluted
*Includes $350 million pre-tax special charges related to "Made For You"
($190 million) and the home office productivity initiative ($160 million),
for a total of $235 million after tax or $0.33 per diluted share.
**Includes the $160 million pre-tax special charge ($110 million after tax
or $0.16 per diluted share) related to the home office productivity
initiative recorded in second quarter 1998. The $190 million special
charge related to "Made For You" has been reversed and $5 million of
additional depreciation for equipment made obsolete has been reclassified,
resulting in a net adjustment to operating income of $185 million.
***Excludes the $160 million pre-tax special charge related to the home
office productivity initiative.
FORWARD-LOOKING STATEMENTS
Certain forward-looking statements are included in this press 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 operating initiatives
and advertising and promotional efforts and changes in: global and local
business and economic conditions; currency exchange and interest rates;
food, labor and other operating costs; political or economic instability in
local markets; competition; consumer preferences, spending patterns and
demographic trends; availability and cost of land and construction;
legislation and government regulation; and accounting policies and
practices.
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