EXHIBIT 99
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Investor Release
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FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
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03/14/01 Investors: Xxxx Xxxxx, 000-000-0000
Media: Xxxx Xxxxxxxx, 000-000-0000
FOR ACCESS TO CONFERENCE CALL:
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When: 10:00 a.m. CT, Wednesday,
March 14, 2001
Where: xxxx://xxx.xxxxxxxxx.xxx
McDONALD'S FIRST QUARTER 2001 UPDATE
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OAK BROOK, IL - XxXxxxxx'x Corporation announced that annual earnings per share
in constant currencies* could be 4 to 5 cents lower than previous guidance,
primarily due to ongoing business challenges in Europe. The Company anticipates
earnings per share for the first quarter of 2001 will be 29-30 cents on a
reported basis, and 30-31 cents in constant currencies.
Xxxx X. Xxxxxxxxx, Chairman and Chief Executive Officer, commented, "We
anticipated difficult worldwide comparisons in the first quarter due to strong
marketing programs last year and the extra day in 2000 due to leap year.
However, the effect of consumer concerns regarding the European beef supply has
persisted longer than we expected, despite the fact that McDonald's overall
safety and quality standards lead the industry and provide the benchmark for
safe food around the world.
"We are taking immediate action to improve financial performance and are
optimistic about returning to double-digit earnings per share growth (in
constant currencies) for the remaining nine months of the year. In addition to
an intense focus on building comparable sales through effective marketing,
operations and menu development around the world, we are:
. Accelerating menu variety in Europe
. Strengthening communications to consumers in Europe, including messages
about McDonald's high-quality and food safety standards
. Reviewing worldwide G&A budgets for cost savings opportunities, which
may be reinvested in additional sales and profit building activities
. Reducing 2001 capital expenditures in certain emerging markets that have
had significant economic downturns and are not rebounding as quickly as
expected
"Our optimism for the year is based on these plans as well as an
expectation that confidence in the European beef supply will be restored and
that we'll see some improvement in weak economic conditions in other parts of
the world.
"McDonald's is a strong company with great prospects, given our brand,
customer acceptance, and outstanding owner/operators and suppliers. Over our
46-year history, we have had up and down cycles often driven by external
factors. Currently, we are facing a short-term set of difficult circumstances,
which will take some time to work through. But none of these short-term
challenges have lessened our enthusiasm for the opportunity to bring the
McDonald's experience to customers around the world."
Global Systemwide sales for the first two months of 2001 were $6.2 billion,
a 4 percent increase on a constant currency basis, or flat on a reported basis
compared with the same period last year. These sales results were tempered by
consumer concerns regarding the BSE issue in certain European markets,
continuing weak economic conditions in certain markets and difficult comparisons
caused by strong marketing programs and the extra trading day in 2000. The
reported results were also reduced by weaker foreign currencies, compared with
the year ago period, especially the Euro, the British Pound and the Japanese
Yen. If foreign currency exchange rates remain constant for the rest of the
year, the translation effect on our reported earnings per share for the year
would be 2 to 3 cents.
In Europe, constant currency sales growth was flat for the first two
months, compared with a strong 14 percent increase one year ago. Sales in the
U.S. grew 4 percent for this period, compared with 6 percent growth last year in
this period. Sales in Asia/Pacific, the Company's third largest segment,
increased 2 percent in constant currencies for the first two months of 2001,
compared with a 12 percent increase one year ago. In Latin America, sales
increased 9 percent in constant currencies year-to-date. Sales in the Other
segment increased 42 percent in constant currencies for the same period,
primarily due to the addition of Boston Market in May 2000.
Xxxxxxxxx added, "We believe that our infrastructure, management capability
and global reach are significant levers for growth. People all over the world
continue to increase their frequency of eating out and McDonald's continues to
figure prominently in their choices. Therefore, we continue to be confident in
our long-term growth opportunities."
In conjunction with its first quarter 2001 update, McDonald's Corporation
will webcast its investor conference call over the Internet on Wednesday, March
14 at 10:00 a.m., Central Time. Interested parties are invited to listen by
logging on to: xxxx://xxx.xxxxxxxxx.xxx/xxxxxxxxx/xxxxxxxx and clicking on
"Investor Webcasts" under "Latest News".
McDonald's is the world's largest and best-known food service retailer,
with about 29,000 restaurants in 120 countries serving 45 million people each
day.
Certain forward-looking statements are included in this report. They use
such words as "may," "will," "expect," "believe," "plan" and other similar
terminology. These statements reflect management's current expectations
regarding future events and operating performance and speak only as of the date
of this report. These forward-looking statements involve a number of risks and
uncertainties. The following are some of the factors that could cause actual
results to differ materially from those expressed in or underlying our forward-
looking statements: the effectiveness of operating initiatives and advertising
and promotional efforts, the effects of the Euro conversion, as well as changes
in: global and local business and economic conditions; currency exchange
(particularly the Euro) and interest rates; food, labor and other operating
costs; political or economic instability in local markets; competition; consumer
preferences, spending patterns and demographic trends; legislation and
governmental regulation; and accounting policies and practices. The foregoing
list of important factors is not exclusive.
The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
*Information in constant currencies excludes the effect of foreign currency
translation on reported results, except for hyperinflationary economies, such
as Russia, whose functional currency is the U.S. Dollar.
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