McDonald's Business Momentum Drives Strong Results for 2007

30/01/08 McDonald’s Corporation has announced strong operating results for the fourth quarter and year, fueled by strong comparable sales.

Chief Executive Officer Jim Skinner commented, "McDonald’s consolidated performance continues to reflect our enduring profitable growth with comparable sales up 6.8% for the year – one of our strongest increases since the initiation of our Plan to Win. We continue to drive our business by linking consumer insights to our strategies of convenience, branded affordability and innovative menu offerings."

McDonald’s reported the following fourth quarter highlights:
• Global comparable sales increased 6.7%, on top of a 6.3% increase in 2006
• Growth in consolidated Company-operated and franchised restaurant margins for the eighth consecutive quarter
• Consolidated operating income increased 22% (15% in constant currencies)
• Earnings per share were $1.06, including $0.33 per share of income tax benefits. Currency translation benefited earnings by $0.04 per share
• The Company repurchased over $1.3 billion of its stock

Full year 2007 highlights included:
• Revenues reached a record high of $22.8 billion on global comparable sales of 6.8%
• Company-operated and franchised margins rose by 110 basis points and 80 basis points, respectively
The Company returned $5.7 billion to shareholders through shares repurchased and dividends paid

Jim Skinner continued, "For the quarter, the U.S. business generated solid comparable sales growth of 3.3% and increased operating income by 6% by staying in-tune with growing consumer demand around breakfast, beverages, and everyday value. While severe winter weather throughout the month and softer consumer spending resulted in December U.S. comparable sales being flat, we remain confident in our U.S. business. Our strategic initiatives, anchored by McDonald’s three-tiered menu of premium, core and Dollar Menu options, position us well to grow sales and build customer loyalty for 2008 and beyond.

"For the fourth quarter, Europe generated double-digit revenue and operating income growth, driven by positive comparable sales in every market as a result of unique marketing and locally appealing menu offerings. Europe’s momentum reflects the success of our strategies as we continue to upgrade the customer experience and build brand transparency.

"Asia/Pacific, Middle East and Africa delivered outstanding quarterly results driven by an 11.4% comparable sales increase – marking the segment’s highest annual comparable result in more than 15 years. Strong results in most markets, led by China, Japan and Australia contributed to the segment’s robust performance for the year.

"We remain committed to maintaining fiscal discipline and enhancing shareholder value. During 2007, we raised our cash return to shareholders target to $15 billion to $17 billion for 2007 through 2009. McDonald’s delivered $5.7 billion of this commitment during 2007 through our combined dividends and share repurchases.

"Separately, given the substantial increase to the Company’s dividend over the last several years, McDonald’s Board of Directors has decided that beginning in 2008, dividends declared will be paid on a quarterly basis. On January 24, 2008, McDonald’s Board of Directors declared a dividend for the first quarter of 2008 of $0.375 per share payable on March 17, 2008 to shareholders of record on March 3, 2008. The Board of Directors will continue to review the Company’s dividend rate annually each fall.

"For 2008, we remain focused on delivering a great McDonald’s experience to each of the nearly 56 million customers we serve every day. I am confident that our strong global brand, resilient business model and proven Plan to Win strategy will continue to deliver long-term value for our System and our shareholders. I am optimistic about McDonald’s outlook for 2008."