McDonald's Delivers Another Year of Strong Results In 2009
OAK BROOK, Ill., Jan. 22 /PRNewswire-FirstCall/ -- McDonald's Corporation today announced strong results for the fourth quarter and year ended December 31, 2009, driven by global comparable sales growth.
"McDonald's 2009 results reflect the broad-based strength of our global business," said McDonald's Chief Executive Officer, Jim Skinner. "Our in-demand food and beverages, unparalleled convenience and superior value at every level of our menu enabled us to serve 60 million customers per day during 2009, up 2 million per day over the prior year. In addition, McDonald's profitability increased as we marked our sixth consecutive year of positive comparable sales in every geographic segment and generated higher global revenues, operating income and earnings per share in constant currencies – all tremendous accomplishments given the tough global economy."
Full year 2009 highlights included:
- Global comparable sales increase of 3.8%, fueled by the U.S. 2.6%, Europe 5.2% and Asia/Pacific, Middle East and Africa 3.4%
- Growth in McDonald's combined operating margin to 30.1%
- Consolidated operating income increase of 6% (10% in constant currencies) over the prior year
- Earnings per share of $4.11, up 9% (13% in constant currencies) over the prior year
- Return of $5.1 billion to shareholders through shares repurchased and dividends paid, bringing the three-year total to $16.6 billion under the Company's $15 billion to $17 billion cash return to shareholders target for 2007 through 2009
Fourth quarter highlights included:
- Global comparable sales increase of 2.3%, with all segments reporting positive results
- Operating income increases in the U.S. 5%, Europe 20% (10% in constant currencies) and Asia/Pacific, Middle East and Africa 51% (28% in constant currencies)
- Earnings per share of $1.11, including an $0.08 per share benefit primarily due to the resolution of certain liabilities retained in connection with the 2007 Latin America developmental license transaction. Currency translation also benefited earnings by $0.07 per share
- On January 21, McDonald's Board of Directors declared a quarterly cash dividend of $0.55 per share of common stock, payable on March 15, 2010 to shareholders of record at the close of business on March 1, 2010
Throughout 2009, McDonald's U.S. sales outpaced the overall quick-service restaurant industry and drove market share increases. In the fourth quarter, U.S. operating income rose as consumers enjoyed core menu favorites, everyday value offerings and new premium products, including McCafe espresso-based coffees and the Angus Third Pounder, and commodity costs eased.
McDonald's Europe delivered strong comparable sales for the fourth quarter against robust prior year results. The U.K., France and Russia led the segment's operating income growth for the quarter. Emphasis on fourth-tier menu development, premium product innovation, daypart expansion and restaurant reimaging continued to provide an appealing restaurant experience and drive market share gains.
In the fourth quarter, Asia/Pacific, Middle East and Africa (APMEA) delivered impressive double-digit operating income growth fueled by results in Australia, expansion in China and operating efficiencies and lower commodity costs in many markets. Strong execution in convenience, value, core menu and breakfast continued to drive APMEA's performance.
Jim Skinner concluded, "As we begin 2010, McDonald's January global comparable sales trend remains positive. We will continue our fiscal discipline by investing prudently and returning excess cash to shareholders. I am confident that the collective efforts of our franchisees, suppliers and employees will continue to drive value for all stakeholders."
KEY HIGHLIGHTS – CONSOLIDATED
Dollars in millions, except per share data
-------------------------------------------------------------------------
Quarters ended Dec 31, Years ended Dec 31,
-------------------------------------------------------------------------
% Inc % Inc
Excl % Excl
% Curr Inc/ Curr
2009 2008 Inc Trans 2009 2008 (Dec) Trans
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Revenues $5,973.4 $5,565.0 7 2 $22,744.7 $23,522.4 (3) 2
Operating
income 1,826.3 1,502.2 22 14 6,841.0 6,442.9 6 10
Net income 1,216.8 985.3 23 16 4,551.0 4,313.2 6 9
Earnings
per share-
diluted* 1.11 0.87 28 20 4.11 3.76 9 13
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* 2009 results include a positive impact of $0.07 per share for the
quarter and a negative impact of $0.15 per share for the year due to
the effect of foreign currency translation.
In addition, the following items impacted the growth in diluted
earnings per share for the quarter and year ended December 31, 2009
compared with 2008:
For the quarter ended December 31, 2009:
- $0.08 per share after tax income primarily due to the resolution of
certain liabilities retained in connection with the 2007 Latin
America developmental license transaction
This item positively impacted the growth in diluted earnings per share
for the quarter by 10 percentage points.
For the year ended December 31, 2009:
- $0.08 per share after tax income primarily due to the resolution of
certain liabilities retained in connection with the 2007 Latin
America developmental license transaction
- $0.05 per share after tax gain related to the sale of the Company's
minority interest in Redbox Automated Retail, LLC
For the year ended December 31, 2008:
- $0.09 per share after tax gain on the sale of the Company's minority
interest in Pret A Manger
In the aggregate, these items positively impacted the growth in diluted
earnings per share for the year by 1 percentage point (no impact on the
growth rate in constant currencies).
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. Comparable sales exclude the impact of currency translation. Some of the reasons restaurants may be temporarily closed include reimaging or remodeling, rebuilding, road construction and natural disasters. 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 our 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 certain incentive compensation plans on these results because they believe this better represents the Company's underlying business trends.
RELATED COMMUNICATIONS
McDonald's Corporation will broadcast its investor conference call live over the Internet at 10:00 a.m. Central Time on January 22, 2010. 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.
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 year ended December 31, 2009.
The Company plans to release January 2010 sales information on February 9, 2010.
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, 2009 2008 $ %
-------------------------------------------------------------------------
Revenues
Sales by Company-operated restaurants $4,030.0 $3,855.0 175.0 5
Revenues from franchised restaurants 1,943.4 1,710.0 233.4 14
TOTAL REVENUES 5,973.4 5,565.0 408.4 7
Operating costs and expenses
Company-operated restaurant expenses 3,271.6 3,190.9 80.7 3
Franchised restaurants-occupancy expenses 348.4 298.3 50.1 17
Selling, general & administrative expenses 655.8 622.3 33.5 5
Impairment and other charges (credits), net (62.0) 5.0 (67.0) n/m
Other operating (income) expense, net (66.7) (53.7) (13.0) (24)
Total operating costs and expenses 4,147.1 4,062.8 84.3 2
OPERATING INCOME 1,826.3 1,502.2 324.1 22
Interest expense 115.2 116.2 (1.0) (1)
Nonoperating (income) expense, net 10.1 (11.1) 21.2 n/m
Income before provision for income taxes 1,701.0 1,397.1 303.9 22
Provision for income taxes 484.2 411.8 72.4 18
NET INCOME $1,216.8 $ 985.3 231.5 23
EARNINGS PER SHARE-DILUTED $ 1.11 $ 0.87 0.24 28
Weighted average shares
outstanding-diluted 1,093.1 1,131.6 (38.5) (3)
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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, 2009 2008 $ %
-------------------------------------------------------------------------
Revenues
Sales by Company-operated restaurants $15,458.5 $16,560.9 (1,102.4) (7)
Revenues from franchised restaurants 7,286.2 6,961.5 324.7 5
TOTAL REVENUES 22,744.7 23,522.4 (777.7) (3)
Operating costs and expenses
Company-operated restaurant expenses 12,651.2 13,652.9 (1,001.7) (7)
Franchised restaurants-occupancy
expenses 1,301.7 1,230.3 71.4 6
Selling, general & administrative
expenses 2,234.2 2,355.5 (121.3) (5)
Impairment and other charges
(credits), net (61.1) 6.0 (67.1) n/m
Other operating (income) expense, net (222.3) (165.2) (57.1) (35)
Total operating costs and expenses 15,903.7 17,079.5 (1,175.8) (7)
OPERATING INCOME 6,841.0 6,442.9 398.1 6
Interest expense 473.2 522.6 (49.4) (9)
Nonoperating (income) expense, net (24.3) (77.6) 53.3 69
Gain on sale of investment (94.9) (160.1) 65.2 41
Income before provision for income taxes 6,487.0 6,158.0 329.0 5
Provision for income taxes 1,936.0 1,844.8 91.2 5
NET INCOME $4,551.0 $4,313.2 237.8 6
EARNINGS PER SHARE-DILUTED $ 4.11 $ 3.76 0.35 9
Weighted average shares
outstanding-diluted 1,107.4 1,146.0 (38.6) (3)
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n/m Not meaningful
SOURCE McDonald's Corporation
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