Global Comparable Sales Drive Strong Second Quarter Results at McDonald's

OAK BROOK, Ill., July 23 /PRNewswire-FirstCall/ -- McDonald's Corporation
today announced strong operating results for the second quarter, driven by
global comparable sales growth of 6.1%.
"Our strategic focus on putting the customer first in everything we do
continues to yield outstanding operating results," said Chief Executive
Officer Jim Skinner. "For the quarter, we grew comparable sales and guest
counts across all geographic segments and delivered increased profitability.
These results are a testament to the strength and resilience of McDonald's
Plan to Win."
McDonald's reported the following second quarter highlights:

-- Global comparable sales increased 6.1%
-- Growth in consolidated Company-operated and franchised restaurant
margins for the tenth consecutive quarter
-- Earnings per share from continuing operations of $1.04, a 44% increase
(35% in constant currencies) over the prior year, after adjusting for
the impact of the 2007 Latin America transaction. Second quarter 2008
earnings include a $0.10 per share gain from the previously announced
sale of the Company's minority interest in Pret A Manger
-- The Company repurchased 13.3 million shares of its stock for $788
million and paid $422 million in quarterly dividends

Jim Skinner continued, "Our ongoing performance demonstrates that
McDonald's is a trusted and familiar brand offering value, convenience and
choice worldwide. We're operating from a position of strength with
double-digit operating income growth in Europe and Asia/Pacific, Middle East
and Africa and solid quarterly results in the U.S."
For McDonald's U.S., comparable sales were up 3.4% and operating income
increased 6% for the quarter. The U.S. business continues to increase sales
and guest counts through initiatives that provide value and variety to the
consumer. The four key growth strategies of chicken, breakfast, beverages and
convenience drove results with the nationwide launch of the Southern Style
Chicken Biscuit and Sandwich and locally relevant beverage promotions.
In Europe, comparable sales increased 7.4% and operating income rose 29%
(13% in constant currencies) as emphasis on delivering an improved customer
experience along with unique marketing and signature menu options drove
performance. Europe's three-tier menu offerings, innovative new products and
restaurant reimaging continue to give customers even more reasons to visit
McDonald's.
Asia/Pacific, Middle East and Africa delivered strong results, led by
Australia and China along with broad-based strength throughout the segment.
Second quarter comparable sales increased 8.8%, driving operating income up
37% (22% in constant currencies). Throughout Asia/Pacific, Middle East and
Africa, McDonald's everyday value, convenience and appealing product offerings
are fueling results.
Skinner added, "Around the world, McDonald's is powered by the
contributions of a dedicated System of owner/operators, suppliers and
employees who are committed to satisfying every customer, every time. I am
confident that our collective focus on delivering great-tasting quality food
at a compelling value will continue to drive McDonald's momentum."

KEY HIGHLIGHTS - CONSOLIDATED
Dollars in millions, except per share data
-------------------------------------------------------------------------
Quarters ended June 30, Six months ended June 30,
-------------------------------------------------------------------------
%Inc/ %Inc/
2008 2007* (Dec) 2008 2007* (Dec)
-------------------------------------------------------------------------
Revenues $6,075.3 $5,839.4 4 11,690.1 $11,132.1 5
Operating
income
(loss) 1,654.2 (181.7) n/m 3,117.0 999.6 n/m
Income (loss)
from
continuing
operations 1,190.5 (708.4) n/m 2,136.6 58.1 n/m
Income (loss)
from
discontinued
operations (3.3) n/m (7.4) n/m
Net income
(loss) 1,190.5 (711.7) n/m 2,136.6 50.7 n/m
Earnings
(loss)
per share
from
continuing
operations-
diluted 1.04 (0.59) n/m 1.85 0.05 n/m
Earnings
(loss)
per share-
diluted 1.04 (0.60) n/m 1.85 0.04 n/m
-------------------------------------------------------------------------
n/m Comparisons are not meaningful due to the impact of the Latin
America transaction described below.

In August 2007, the Company completed the sale of its businesses in
Brazil, Argentina, Mexico, Puerto Rico, Venezuela and 13 other countries in
Latin America and the Caribbean to a developmental licensee organization. The
Company refers to these markets as "Latam." Under the new ownership structure,
the Company now receives only royalties in these markets instead of a
combination of Company-operated sales and franchised rents and royalties.
In addition to the reported results for the quarter and six months ended
June 30, 2007 shown above, consolidated results for these periods are
presented throughout this report excluding the impact of the Latam
transaction. Management believes the Latam transaction and the associated
charge are not indicative of ongoing operations due to the size and scope of
the transaction. Management believes that the adjusted results better reflect
the underlying business trends relevant to the periods presented.
The following tables present reconciliations of the key consolidated
highlights for the quarters and six months ended June 30, 2008 and 2007 to the
highlights excluding the net impact of the impairment charge from the Latam
transaction.
--------------------------------------------------------------------------
Adjusted
%Inc/
Curr- (Dec)
2007 ency Excl
Quarters Excl Adj Trans Curr-
ended Latam Latam % Bene- ency
June 30, 2008 2007* Trans Trans Inc fit Trans
--------------------------------------------------------------------------
Revenues $6,075.3 $5,839.4 $5,839.4 4 $ 374.9 (2)
Operating
income
(loss) 1,654.2 (181.7) $(1,594.4) 1,412.7 17 111.1 9
Income
(loss)
from
continuing
operations 1,190.5 (708.4) (1,581.6) 873.2 36 73.1 28
Income
(loss)
from
discontinued
operations (3.3) (3.3) n/m n/m
Net income
(loss) 1,190.5 (711.7) (1,581.6) 869.9 37 73.1 28
Earnings
(loss)
per share
from
continuing
operations-
diluted 1.04 (0.59) (1.31) 0.72 44 0.07 35
Earnings
(loss) per
share-
diluted 1.04 (0.60) (1.31) 0.71 46 0.07 37
--------------------------------------------------------------------------
n/m Not meaningful

--------------------------------------------------------------------------
Adjusted
%Inc/
Curr- (Dec)
2007 ency Excl
Six Months Excl Adj Trans Curr-
ended Latam Latam % Bene- ency
June 30, 2008 2007* Trans Trans Inc fit Trans
--------------------------------------------------------------------------

Revenues $11,690.1 $11,132.1 $11,132.1 5 $ 720.4 (1)
Operating
income
(loss) 3,117.0 999.6 $(1,594.4) 2,594.0 20 208.5 12
Income
(loss)
from
continuing
operations 2,136.6 58.1 (1,581.6) 1,639.7 30 134.1 22
Income
(loss)
from
discontinued
operations (7.4) (7.4) n/m n/m
Net income
(loss) 2,136.6 50.7 (1,581.6) 1,632.3 31 134.1 23
Earnings
(loss)
per share
from
continuing
operations-
diluted 1.85 0.05 (1.29) 1.34 38 0.12 29
Earnings
(loss) per
share-
diluted 1.85 0.04 (1.30) 1.34 38 0.12 29
--------------------------------------------------------------------------
* The results for the quarter and six months ended June 30, 2007
included impairment and other charges of $1,611.9 million associated
with the Latam transaction, partly offset by a benefit of $17.5
million due to eliminating depreciation on the assets in Latam in
mid-April 2007 in accordance with accounting rules. The resulting tax
benefit of $12.8 million was minimal in the second quarter 2007 due to
the Company's inability to utilize most of the capital losses
generated by this transaction.

THE FOLLOWING DEFINITIONS APPLY TO THESE TERMS AS USED THROUGHOUT THIS RELEASE
Comparable sales represent sales at all restaurants, including those
operated by the Company, franchisees and affiliates, in operation at least
thirteen months including those temporarily closed, excluding the impact of
currency translation. Some of the reasons restaurants may be temporarily
closed include reimaging or remodeling, road construction and natural
disasters. Management reviews the increase or decrease in comparable sales
compared with the same period in the prior year to assess business trends.
Information in constant currency is calculated by translating current year
results at prior year average exchange rates. Management reviews and analyzes
business results excluding the effect of foreign currency translation and
bases certain incentive compensation plans on these results because they
believe this better represents the Company's underlying business trends.
The number of weekdays, weekend days and timing of holidays can impact our
reported comparable sales. In the six months of 2008, the Company benefited
from this calendar shift/trading day adjustment, which consisted of one
additional trading day compared with the six months of 2007, due to 2008 being
a leap year.
RELATED COMMUNICATIONS
McDonald's Corporation will broadcast its investor conference call live
over the Internet at 12:00 p.m. / Noon Central Time on July 23, 2008. A link
to the live webcast will be available at http://www.investor.mcdonalds.com.
There will also be an archived webcast and podcast available for a limited
time.
See Exhibit 99.2 in the Company's Form 8-K filing for supplemental
information related to the Company's results for the quarter and six months
ended June 30, 2008.
The Company plans to release July 2008 sales information on August 8,
2008.
FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements, which reflect
management's expectations regarding future events and operating performance
and speak only as of the date hereof. These forward-looking statements involve
a number of risks and uncertainties. The factors that could cause actual
results to differ materially from our expectations are detailed in the
Company's filings with the Securities and Exchange Commission, such as its
annual and quarterly reports and current reports on Form 8-K.

McDONALD'S CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Inc /
Dollars and shares in millions, except per share data (Dec)
--------------------------------------------------------------------------
Quarters ended June 30, 2008 2007 $ %
--------------------------------------------------------------------------
Revenues
Sales by Company-operated
restaurants $4,296.0 $4,317.8 (21.8) (1)
Revenues from franchised and
affiliated restaurants 1,779.3 1,521.6 257.7 17

TOTAL REVENUES 6,075.3 5,839.4 235.9 4

Operating costs and expenses
Company-operated restaurant
expenses 3,535.2 3,558.2 (23.0) 1
Franchised restaurants-occupancy
expenses 315.3 281.5 33.8 12
Selling, general &
administrative expenses 598.7 591.9 6.8 1
Impairment and other
charges, net 0.5 1,611.3 (1,610.8) n/m
Other operating (income)
expense, net (28.6) (21.8) (6.8) (31)
Total operating costs
and expenses 4,421.1 6,021.1 (1,600.0) (27)

OPERATING INCOME (LOSS) 1,654.2 (181.7) 1,835.9 n/m

Interest expense 146.3 101.8 44.5 44
Nonoperating (income)
expense, net (30.8) (16.9) (13.9) 82
Gain on sale of investment (160.1) (160.1) n/m

Income (loss) from continuing
operations before provision
for income taxes 1,698.8 (266.6) 1,965.4 n/m
Provision for income taxes 508.3 441.8 66.5 15

Income (loss) from continuing
operations 1,190.5 (708.4) 1,898.9 n/m
Income (loss) from discontinued
operations (net of tax
benefit of $2.3) (3.3) 3.3 n/m

NET INCOME (LOSS) $1,190.5 $ (711.7) 1,902.2 n/m

Earnings (loss) per share-diluted
Continuing operations $ 1.04 $ (0.59) 1.63 n/m
Discontinued operations -- n/m n/m

EARNINGS (LOSS) PER SHARE-DILUTED $ 1.04 $ (0.60) 1.64 n/m

Weighted average shares
outstanding basic 1,128.9 1,193.7 (64.8) (5)
Weighted average shares
outstanding-diluted* 1,148.8 1,193.7 (44.9) (4)
-------------------------------------------------------------------------
n/m Not meaningful

* For the quarter ended June 30, 2007, common stock equivalents of 23.2
million were excluded from the computation of weighted average shares
outstanding-diluted as a result of the net loss.

McDONALD'S CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Inc /
Dollars and shares in millions, except per share data (Dec)
--------------------------------------------------------------------------
Six months ended June 30, 2008 2007 $ %
--------------------------------------------------------------------------
Revenues
Sales by Company-operated
restaurants $ 8,294.8 $ 8,231.6 63.2 1
Revenues from franchised and
affiliated restaurants 3,395.3 2,900.5 494.8 17

TOTAL REVENUES 11,690.1 11,132.1 558.0 5

Operating costs and expenses
Company-operated
restaurant expenses 6,874.8 6,851.5 23.3 --
Franchised restaurants-occupancy
expenses 615.1 557.2 57.9 10
Selling, general &
administrative expenses 1,151.1 1,137.1 14.0 1
Impairment and other charges, net 1.0 1,613.9 (1,612.9) n/m
Other operating (income)
expense, net (68.9) (27.2) (41.7) n/m
Total operating costs
and expenses 8,573.1 10,132.5 (1,559.4) (15)

OPERATING INCOME 3,117.0 999.6 2,117.4 n/m

Interest expense 274.8 199.0 75.8 38
Nonoperating (income)
expense, net (59.7) (33.6) (26.1) (78)
Gain on sale of investment (160.1) (160.1) n/m

Income from continuing operations
before provision for
income taxes 3,062.0 834.2 2,227.8 n/m
Provision for income taxes 925.4 776.1 149.3 19

Income from continuing operations 2,136.6 58.1 2,078.5 n/m
Income (loss) from discontinued
operations (net of tax
benefit of $5.0) (7.4) 7.4 n/m

NET INCOME $2,136.6 $ 50.7 2,085.9 n/m

Earnings (loss) per share-diluted
Continuing operations $ 1.85 $ 0.05 1.80 n/m
Discontinued operations $ (0.01) 0.01 n/m

EARNINGS PER SHARE-DILUTED $ 1.85 $ 0.04 1.81 n/m

Weighted average shares
outstanding-basic 1,137.2 1,197.4 (60.2) (5)
Weighted average shares
outstanding-diluted 1,157.1 1,220.4 (63.3) (5)
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n/m Not meaningful

SOURCE McDonald's Corporation

Investors, Mary Kay Shaw, +1-630-623-7559, or Media, Heidi Barker,
+1-630-623-3791, both of McDonald's Corporation