McDonald's Reports Growth In Fourth Quarter And Full Year 2012

Wed Jan 23, 2013 7:58am EST

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OAK BROOK, Ill.,  Jan. 23, 2013  /PRNewswire/ -- McDonald's Corporation today
announced results for the fourth quarter and year ended  December 31, 2012,
reflecting higher revenues, operating income and earnings per share compared
with the prior year.

"Throughout 2012 we concentrated our efforts behind the global priorities that
represent our greatest opportunities under the Plan to Win - optimizing our
menu, modernizing the customer experience and broadening accessibility to our
Brand," said McDonald's Chief Executive Officer  Don Thompson. "McDonald's
continued to grow by remaining focused on what matters most to our customers,
although our results reflect the impact of the challenging global operating,
economic and competitive environment. Our overall performance is a testament to
the underlying strength of our business and our dedicated System of franchisees,
suppliers and employees who continue to drive toward our mission to become our
customers' favorite place and way to eat and drink."

Full year 2012 highlights included:

* Global comparable sales increased 3.1%, with the U.S. up 3.3%,  Europe  up
2.4% and  Asia/Pacific,  Middle East  and  Africa  (APMEA) up 1.4%
* Consolidated revenues up 2% (5% in constant currencies)
* Consolidated operating income increase of 1% (4% in constant currencies), with
the U.S. up 2%,  Europe  down 1% (up 6% in constant currencies) and APMEA up 3%
(3% in constant currencies)
* Diluted earnings per share of  $5.36, up 2% (5% in constant currencies)
* Returned  $5.5 billion  to shareholders through dividends and share
repurchases

Fourth Quarter highlights included:

* Global comparable sales increased 0.1%
* Consolidated revenues increased 2% (2% in constant currencies)
* Consolidated operating income increase of 4% (4% in constant currencies)
* Diluted earnings per share of  $1.38, up 4% (5% in constant currencies)

McDonald's U.S. generated positive comparable sales and operating income results
for the year despite ongoing economic and competitive pressures. Fourth quarter
comparable sales increased 0.3% and operating income was relatively flat against
strong prior year results. During the quarter, the U.S. focused on enhancing its
value leadership position by balancing strong everyday value messaging with
affordable and compelling premium menu options.  

For the year,  Europe  delivered comparable sales and constant currency
operating income growth despite ongoing economic uncertainty throughout the
segment. During the fourth quarter,  Europe's operating income rose 5% (up 7% in
constant currencies) while comparable sales were down 0.6% due to negative
comparable guest counts and strong prior year performance. The U.K. and  Russia 
were key contributors to the segment's operating income performance for both
periods. Emphasis on unique promotional food events, expanded value offerings
and restaurant reimaging continued to provide an appealing customer experience
and supported the segment's results.

For the year, APMEA generated positive comparable sales and operating income
growth. APMEA's fourth quarter comparable sales declined 1.7% and operating
income was flat (down 1% in constant currencies) against strong prior year
results. Positive quarterly sales and operating results in  Australia  were more
than offset by ongoing weakness in  Japan  and other markets. Throughout APMEA,
consumers continued to respond to the segment's compelling value platforms,
great tasting premium menu selections and relevant convenience.

Don Thompson  continued, "As we begin the new year, our average annual long-term
targets in constant currency remain intact: Systemwide sales growth of 3% to 5%,
operating income growth of 6% to 7%, and return on incremental invested capital
in the high teens. We believe these targets remain realistic and sustainable for
a company of our size and maturity. In 2013, we plan to invest about  $3.2
billion  of capital to open between 1,500 - 1,600 new McDonald's restaurants and
to reinvest in our existing locations, including reimaging more than 1,600
locations worldwide. We are confident that now is an opportune time to invest in
our restaurant portfolio in ways that will yield value for all stakeholders in
the future."

Don Thompson  concluded, "Moving forward, we remain focused on seizing the
long-term opportunities in the global marketplace by leveraging our competitive
advantages. We have a brand advantage in convenience, menu variety and value, a
resilient business model, and the experience and alignment throughout the
McDonald's System to navigate the current environment. For the near-term we
expect top and bottom-line growth to remain pressured, with January's global
comparable sales expected to be negative."

 KEY HIGHLIGHTS - CONSOLIDATED                                                                                                                                                                                                                                                 
 
Dollars in millions, except per share data                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                       
                              Quarters Ended December 31,                                                                                      Years Ended December 31,                                                                                                     
                              2012                      2011                      % Inc       % Inc Excluding Currency Translation     2012                       2011                       % Inc/ (Dec)            % Inc Excluding Currency Translation  
 Revenues                     $     6,952.1            $     6,822.7            2           2                                        $     27,567.0            $     27,006.0            2                       5                                     
 Operating income             2,197.8                   2,120.0                   4           4                                        8,604.6                    8,529.7                    1                       4                                     
 Net income                   1,396.1                   1,376.6                   1           2                                        5,464.8                    5,503.1                    (1)                     3                                     
 Earnings per share-diluted*  1.38                      1.33                      4           5                                        5.36                       5.27                       2                       5                                     
                                                                                                                                                                                                                                                                              


 *  Foreign currency translation had a negative impact of $0.01 and $0.17 on diluted earnings per share for the quarter and year ended December 31, 2012, respectively.                                                                            


THE FOLLOWING DEFINITIONS APPLY TO THESE TERMS AS USED THROUGHOUT THIS RELEASE  

Comparable sales represent sales at all restaurants and comparable guest counts
represent the number of transactions at all restaurants, whether operated by the
Company or by franchisees, in operation at least thirteen months including those
temporarily closed. Some of the reasons restaurants may be temporarily closed
include reimaging or remodeling, rebuilding, road construction and natural
disasters. Comparable sales exclude the impact of currency translation.
Comparable sales are driven by changes in guest counts and average check, which
is affected by changes in pricing and product mix. Management reviews the
increase or decrease in comparable sales and comparable guest counts compared
with the same period in the prior year to assess business trends. The number of
weekdays and weekend days, referred to as the calendar shift/trading day
adjustment, can impact comparable sales and guest counts. In addition, the
timing of holidays can impact comparable sales and guest counts.

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
incentive compensation plans on these results because they believe this better
represents the Company's underlying business trends.

RELATED COMMUNICATIONS  

This press release should be read in conjunction with Exhibit 99.2 in the
Company's Form 8-K filing for supplemental information related to the Company's
results for the quarter and year ended  December 31, 2012.

McDonald's Corporation will broadcast its investor conference call live over the
Internet at  10:00 a.m. Central Time  on  January 23, 2013. A link to the live
webcast will be available at  www.investor.mcdonalds.com. There will also be an
archived webcast and podcast available for a limited time.

The Company plans to release  January 2013  sales information on  February 8,
2013.

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                                                                                            
                                                                                                                           
 Dollars and shares in millions, except per share data                                              Inc/ (Dec)                    
 Quarters Ended December 31,                            2012                 2011                 $                 %        
 Revenues                                                                                                                        
 Sales by Company-operated restaurants                  $     4,658.4       $     4,587.2       71.2              2        
 Revenues from franchised restaurants                   2,293.7              2,235.5              58.2              3        
                                                                                                                                 
 TOTAL REVENUES                                         6,952.1              6,822.7              129.4             2        
                                                                                                                                 
 Operating costs and expenses                                                                                                    
 Company-operated restaurant expenses                   3,831.1              3,731.1              100.0             3        
 Franchised restaurants-occupancy expenses              392.7                378.0                14.7              4        
 Selling, general & administrative expenses             624.5                661.2                (36.7)            (6)      
 Impairment and other charges (credits), net            1.8                  0.3                  1.5               n/m      
 Other operating (income) expense, net                  (95.8)               (67.9)               (27.9)            (41)     
 Total operating costs and expenses                     4,754.3              4,702.7              51.6              1        
                                                                                                                                 
 OPERATING INCOME                                       2,197.8              2,120.0              77.8              4        
                                                                                                                                 
 Interest expense                                       129.6                126.9                2.7               2        
 Nonoperating (income) expense, net                     0.2                  9.4                  (9.2)             (98)     
                                                                                                                                 
 Income before provision for income taxes               2,068.0              1,983.7              84.3              4        
 Provision for income taxes                             671.9                607.1                64.8              11       
                                                                                                                                 
 NET INCOME                                             $     1,396.1       $     1,376.6       19.5              1        
                                                                                                                                 
 EARNINGS PER SHARE-DILUTED                             $     1.38          $     1.33          0.05              4        
                                                                                                                                 
 Weighted average shares outstanding-diluted            1,010.7              1,034.7              (24.0)            (2)      


                     
 n/m Not meaningful  


 McDONALD'S CORPORATION                                                                                                                     
 
CONDENSED CONSOLIDATED STATEMENT OF INCOME                                                                                                
                                                                                                                               
 Dollars and shares in millions, except per share data                                                  Inc/ (Dec)                    
 Years Ended December 31,                               2012                   2011                   $                 %        
 Revenues                                                                                                                            
 Sales by Company-operated restaurants                  $      18,602.5       $      18,292.8       309.7             2        
 Revenues from franchised restaurants                   8,964.5                8,713.2                251.3             3        
                                                                                                                                     
 TOTAL REVENUES                                         27,567.0               27,006.0               561.0             2        
                                                                                                                                     
 Operating costs and expenses                                                                                                        
 Company-operated restaurant expenses                   15,223.7               14,837.9               385.8             3        
 Franchised restaurants-occupancy expenses              1,527.0                1,481.5                45.5              3        
 Selling, general & administrative expenses             2,455.2                2,393.7                61.5              3        
 Impairment and other charges (credits), net            8.0                    (3.9)                  11.9              n/m      
 Other operating (income) expense, net                  (251.5)                (232.9)                (18.6)            (8)      
 Total operating costs and expenses                     18,962.4               18,476.3               486.1             3        
                                                                                                                                     
 OPERATING INCOME                                       8,604.6                8,529.7                74.9              1        
                                                                                                                                     
 Interest expense                                       516.6                  492.8                  23.8              5        
 Nonoperating (income) expense, net                     9.0                    24.7                   (15.7)            (64)     
                                                                                                                                     
 Income before provision for income taxes               8,079.0                8,012.2                66.8              1        
 Provision for income taxes                             2,614.2                2,509.1                105.1             4        
                                                                                                                                     
 NET INCOME                                             $      5,464.8        $      5,503.1        (38.3)            (1)      
                                                                                                                                     
 EARNINGS PER SHARE-DILUTED                             $      5.36           $      5.27           0.09              2        
                                                                                                                                     
 Weighted average shares outstanding-diluted            1,020.2                1,044.9                (24.7)            (2)      


                     
 n/m Not meaningful  


SOURCE  McDonald's Corporation


Investors: Kathy Martin, 630-623-7833, Media: Heidi Barker, 630-623-3791

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