McDonaldโs Corporation is an American operator and franchisor of fast food restaurants represented worldwide and the biggest fast food company in the world.
FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-5231 ---------- ---------- ------ McDONALD'S CORPORATION ----------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 36-2361282 ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) McDonald's Plaza, Oak Brook, Illinois 60521 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) (708) 575-3000 -------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- 699,250,278 --------------------------------- (Number of shares of common stock outstanding as of March 31, 1996)
McDONALD'S CORPORATION ---------------------- INDEX ----- Page Reference Part I. Financial Information Item 1 - Financial Statements Condensed consolidated balance sheet, March 31, 1996 (unaudited) and December 31, 1995 3 Condensed consolidated statement of income (unaudited), first quarters ended March 31, 1996 and 1995 4 Condensed consolidated statement of cash flows (unaudited), first quarters ended March 31, 1996 and 1995 5 Financial comments (unaudited) 6 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II. Other Information Item 6 - Exhibits and Reports on Form 8-K 15 (a)Exhibits The exhibits listed in the accompanying Exhibit Index are filed as part of this report 15 (b)Reports on Form 8-K 18 Signature 19
PART I. FINANCIAL INFORMATION ------------------------------ Item 1. Financial Statements ----------------------------- <TABLE> <CAPTION> CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) Dollars in millions March 31, 1996 December 31, 1995 --------------------------------------------------------------------------- <S> <C> <C> ASSETS CURRENT ASSETS Cash and equivalents $ 329.5 $ 334.8 Accounts receivable 355.1 377.3 Notes receivable 37.5 36.3 Inventories, at cost, not in excess of market 56.8 58.0 Prepaid expenses and other current assets 154.2 149.4 --------------------------------------------------------------------------- TOTAL CURRENT ASSETS 933.1 955.8 --------------------------------------------------------------------------- OTHER ASSETS AND DEFERRED CHARGES 1,073.6 1,112.7 --------------------------------------------------------------------------- PROPERTY AND EQUIPMENT Property and equipment, at cost 17,430.4 17,137.6 Accumulated depreciation and amortization (4,417.2) (4,326.3) --------------------------------------------------------------------------- NET PROPERTY AND EQUIPMENT 13,013.2 12,811.3 --------------------------------------------------------------------------- INTANGIBLE ASSETS-NET 556.0 534.8 --------------------------------------------------------------------------- TOTAL ASSETS $15,575.9 $15,414.6 =========================================================================== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 536.8 $ 413.0 Accounts payable 462.4 564.3 Income taxes 87.4 55.4 Other taxes 128.8 127.1 Accrued interest 110.9 117.4 Other accrued liabilities 330.1 352.5 Current maturities of long-term debt 465.2 165.2 --------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 2,121.6 1,794.9 --------------------------------------------------------------------------- LONG-TERM DEBT 3,935.3 4,257.8 OTHER LONG-TERM LIABILITIES AND MINORITY INTERESTS 656.2 664.7 DEFERRED INCOME TAXES 868.8 835.9 SHAREHOLDERS' EQUITY Preferred stock, no par value; authorized - 165.0 million shares; issued - 7.2 thousand 358.0 358.0 Common stock, no par value; authorized - 1.25 billion shares; issued - 830.3 million 92.3 92.3 Additional paid-in capital 441.5 387.4 Guarantee of ESOP notes (214.0) (214.2) Retained earnings 10,079.0 9,831.3 Foreign currency translation adjustment (107.6) (87.1) --------------------------------------------------------------------------- 10,649.2 10,367.7 --------------------------------------------------------------------------- Common stock in treasury, at cost; 131.1 and 130.6 million shares (2,655.2) (2,506.4) --------------------------------------------------------------------------- TOTAL SHAREHOLDERS' EQUITY 7,994.0 7,861.3 --------------------------------------------------------------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $15,575.9 $15,414.6 =========================================================================== See accompanying Financial comments. </TABLE>
<TABLE> <CAPTION> CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) Dollars in millions, except Quarters Ended per common share data March 31 1996 1995 ------------------------------------------------------------------------------ <S> <C> <C> REVENUES Sales by Company-operated restaurants $1,713.8 $1,511.6 Revenues from franchised restaurants 712.2 649.7 ------------------------------------------------------------------------------ TOTAL REVENUES 2,426.0 2,161.3 ------------------------------------------------------------------------------ OPERATING COSTS AND EXPENSES Company-operated restaurants 1,419.3 1,233.2 Franchised restaurants- occupancy expenses 137.2 118.2 General, administrative and selling expenses 311.2 275.4 Other operating (income) expense-net (4.2) (12.2) ------------------------------------------------------------------------------ TOTAL OPERATING COSTS AND EXPENSES 1,863.5 1,614.6 ------------------------------------------------------------------------------ OPERATING INCOME 562.5 546.7 ------------------------------------------------------------------------------ Interest expense 84.8 81.0 Nonoperating income (expense)-net (25.6) (30.6) ------------------------------------------------------------------------------ INCOME BEFORE PROVISION FOR INCOME TAXES 452.1 435.1 ------------------------------------------------------------------------------ Provision for income taxes 150.5 154.4 ------------------------------------------------------------------------------ NET INCOME $301.6 $280.7 ============================================================================== NET INCOME PER COMMON SHARE $ .42 $ .39 ------------------------------------------------------------------------------ DIVIDENDS PER COMMON SHARE $.0675 $.0600 ------------------------------------------------------------------------------ See accompanying Financial comments. </TABLE>
<TABLE> <CAPTION> CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) Quarters Ended March 31 Dollars in millions 1996 1995 ------------------------------------------------------------------------------- <S> <C> <C> OPERATING ACTIVITIES Net income $301.6 $280.7 Adjustments to reconcile to cash provided by operations Depreciation and amortization 186.6 168.8 Changes in operating working capital items (26.0) (72.3) Other 12.1 28.6 ------------------------------------------------------------------------------- CASH PROVIDED BY OPERATIONS 474.3 405.8 ------------------------------------------------------------------------------- INVESTING ACTIVITIES Property and equipment expenditures (467.1) (347.7) Purchases and sales of restaurant businesses and sales of other property 4.6 8.1 Other (31.7) (8.1) ------------------------------------------------------------------------------- CASH USED FOR INVESTING ACTIVITIES (494.2) (347.7) ------------------------------------------------------------------------------- FINANCING ACTIVITIES Notes payable and long-term financing issuances and repayments 171.9 10.1 Treasury stock purchases (140.0) (6.9) Common and preferred stock dividends (53.5) (54.6) Other 36.2 11.6 ------------------------------------------------------------------------------- CASH PROVIDED BY (USED FOR) FINANCING 14.6 (39.8) ACTIVITIES ------------------------------------------------------------------------------- CASH AND EQUIVALENTS INCREASE (5.3) 18.3 (DECREASE) ------------------------------------------------------------------------------- Cash and equivalents at beginning of 334.8 179.9 period ------------------------------------------------------------------------------- CASH AND EQUIVALENTS AT END OF PERIOD $329.5 $198.2 =============================================================================== See accompanying Financial comments. </TABLE>
FINANCIAL COMMENTS (UNAUDITED) BASIS OF PRESENTATION The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company's 1995 Annual Report to Shareholders. In the opinion of the Company, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation have been included. The results of operations of restaurant businesses purchased and sold were not material to the condensed consolidated financial statements for periods prior to purchase and sale. NET INCOME PER COMMON SHARE Net income per common share was computed using net income, reduced by preferred stock cash dividends (net of tax) of $6.9 and $11.9 million for the first quarters of 1996 and 1995, respectively. Adjusted net income was divided by the weighted average shares of common stock outstanding: 700.5 and 694.3 million for the first quarters ended March 31, 1996 and 1995, respectively. Including the effect of potentially dilutive securities, fully diluted earnings per common share amounts were $0.41 and $0.38 for the first quarters ended March 31, 1996 and 1995, respectively. LINE OF CREDIT AGREEMENT The Company has a long-term revolving credit agreement for $675.0 million and a $25 million revolving credit agreement expiring April 19, 2000 with a renewable term of 364 days. Both agreements, with various banks, remained unused at March 31, 1996 and provide for fees of .07% per annum on the total commitment. NEW ACCOUNTING STANDARD - ASSET IMPAIRMENT The Company adopted Statement of Financial Accounting Standard No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of, in the first quarter 1996. This statement requires impairment losses be recognized for long-lived assets, whether these assets are held for disposal or continue to be used in operations, when indicators of impairment are present and the fair value of assets are estimated to be less than carrying amounts. The fair value of assets was based on projected future cash flows. The adoption of this standard resulted in a $16 million noncash pre- tax charge in first quarter 1996 to other operating (income) expense, equivalent to 2 cents per common share, related to restaurant sites in Mexico.
Item 2. Management's Discussion And Analysis Of Financial Condition -------------------------------------------------------------------- And Results Of Operations ------------------------- <TABLE> <CAPTION> INCREASES (DECREASES) IN OPERATING RESULTS OVER 1995 Dollars in millions, except First Quarter per common share data Ended March 31 ------------------------------------------------------------------------- <S> <C> <C> SYSTEMWIDE SALES $637.9 10% ------------------------------------------------------------------------- REVENUES Sales by Company-operated restaurants $202.2 13% Revenues from franchised restaurants 62.5 10 ------------------------------------------------------------------------- TOTAL REVENUES 264.7 12 ------------------------------------------------------------------------- OPERATING COSTS AND EXPENSES Company-operated restaurants 186.1 15 Franchised restaurants- occupancy costs 19.0 16 General, administrative and selling expenses 35.8 13 Other operating (income) expense-net* 8.0 (66) ------------------------------------------------------------------------- TOTAL OPERATING COSTS AND EXPENSES* 248.9 15 ------------------------------------------------------------------------- OPERATING INCOME* 15.8 3 ------------------------------------------------------------------------- Interest expense 3.8 5 Nonoperating income (expense)-net 5.0 (16) ------------------------------------------------------------------------- INCOME BEFORE PROVISION FOR INCOME TAXES* 17.0 4 ------------------------------------------------------------------------- Provision for income taxes (3.9) (3) NET INCOME* $20.9 7% ========================================================================= NET INCOME PER COMMON SHARE* $ .03 8% ------------------------------------------------------------------------- * Including the effect of the 1996 noncash charge related to the adoption of SFAS No. 121. </TABLE>
CONSOLIDATED OPERATING RESULTS Reported net income and net income per common share increased 7 and 8 percent, respectively. Excluding the noncash charge for the adoption of SFAS No. 121, net income and net income per common share increased 11 and 13 percent, respectively. In the first quarter of 1996, the Company repurchased about $165 million of its common stock in connection with a three-year, $2.2 billion program announced in January, 1996. Systemwide sales represent sales by Company-operated, franchised and affiliated restaurants. Total revenues consist of sales by Company-operated restaurants and fees from restaurants operated by franchisees and affiliates. These fees are based upon a percent of sales with specified minimum payments. The increases in sales and revenues were due to worldwide expansion and positive comparable sales outside of the U.S. ---------------------------------------------------------------------- SYSTEMWIDE RESTAURANT ADDITIONS Quarters Ended March 31 1996 1995 ---------------------------------------------------------------------- Traditional restaurants U.S. 62 51 Outside of the U.S. 143 114 ---------------------------------------------------------------------- Total traditional restaurant additions 205 165 ---------------------------------------------------------------------- Satellite restaurants U.S. 67 109 Outside of the U.S. 44 29 ---------------------------------------------------------------------- Total satellite restaurant additions 111 138 ---------------------------------------------------------------------- Systemwide restaurants U.S. 129 160 Outside of the U.S. 187 143 ---------------------------------------------------------------------- Systemwide restaurant additions 316 303 ---------------------------------------------------------------------- TRADITIONAL RESTAURANTS UNDER CONSTRUCTION First Quarters 1996 1995 ---------------------------------------------------------------------- U.S. 115 99 Outside of the U.S. 272 228 ---------------------------------------------------------------------- Total traditional restaurants under construction 387 327 ---------------------------------------------------------------------- CONSOLIDATED OPERATING MARGINS First Quarters 1996 1995 ---------------------------------------------------------------------- In millions of dollars Company-operated $294.5 $278.4 Franchised 575.0 531.5 As a percent of sales/revenues Company-operated 17.2 18.4 Franchised 80.7 81.8 ----------------------------------------------------------------------
Franchised margin dollars comprised about two-thirds of the combined operating margins, the same as in the prior year. Franchised margins as a percent of applicable revenues declined. This reflects a higher proportion of leased sites which have financing costs embedded in rent expense, contrasted with owned sites whose financing costs are reflected in interest expense. The decline in Company-operated margins as a percent of sales reflected higher food & paper and occupancy & other operating costs. Payroll costs remained relatively flat as a percent of sales. The increase in general, administrative & selling expenses was primarily due to strategic global spending to support the Convenience, Value and Execution Strategies. Other operating transactions relate to franchising and the foodservice business, the details of which are shown below. The increase in the other category reflects the $16 million noncash charge related to the adoption of SFAS No. 121, partially offset by lower provisions for property dispositions. ------------------------------------------------------------------------ OTHER OPERATING (INCOME) EXPENSE-NET First Quarters In millions of dollars 1996 1995 ------------------------------------------------------------------------ Gains on sales of restaurant businesses $(9.0) $(11.9) Equity in earnings of unconsolidated affiliates (18.5) (19.2) Other 23.3 18.9 ------------------------------------------------------------------------ Other operating (income) expense--net $(4.2) $(12.2) ======================================================================== The increase in consolidated operating income primarily reflected higher combined operating margin dollars, partially offset by higher general, administrative & selling expenses and the $16 million noncash charge related to the adoption of SFAS No. 121. The increase in interest expense was due to higher debt levels, partially offset by lower average interest rates. Nonoperating income (expense) in the first quarter of 1996 included $22 million of unrealized losses associated with the Company's investment in Discovery Zone common stock, which reduced the carrying value of this investment to zero. Similar unrealized losses totaling $60 million were recorded throughout 1995. The 1996 amount was also impacted by higher interest income and lower translation losses. The effective income tax rate was 33.3 percent in the first quarter of 1996, compared to 35.5 percent in the first quarter of 1995 and 34.2 percent for the year 1995. The 1996 decrease was primarily due to lower taxes related to foreign operations. For the year, the Company expects the effective tax rate to be in the range of 32.5 to 33.5 percent.
U.S. OPERATING RESULTS Restaurant expansion was responsible for increasing U.S. sales. Comparable U.S. sales were negative for the quarter reflecting an extremely challenging U.S. operating environment, difficult comparisons and severe weather. National promotional efforts included discounted price points on selected products. The U.S. business also continued its emphasis on value and customer satisfaction in the form of Extra Value Meals, Happy Meals and the three-tier value program. ---------------------------------------------------------------------- U.S. OPERATING RESULTS First Quarters 1996 1995 ---------------------------------------------------------------------- Percent increase Sales 3 8 Revenues 4 9 Operating income (4) 4 ---------------------------------------------------------------------- As a percent of sales/revenues Company-operated margins 15.0 16.3 Franchised margins 80.5 82.4 ---------------------------------------------------------------------- The decrease in U.S. operating income reflected lower Company- operated margin dollars, higher general, administrative & selling expenses and higher other operating expenses. These items were partially offset by higher franchised margin dollars resulting from expansion. The decline in Company-operated margins as a percent of sales primarily resulted from higher occupancy & other operating expenses and higher payroll costs due to higher average hourly wages and increased staffing levels designed to improve customer satisfaction. The decline in franchised margins as a percent of revenues was primarily due to increased rent expense reflecting a higher proportion of leased sites resulting from accelerated expansion. OPERATING RESULTS OUTSIDE OF THE U.S. Expansion and higher comparable sales were responsible for sales increases outside of the U.S., offset in part by the impact of a weaker Japanese Yen. Comparable sales on a local currency basis were positive for the first quarters of 1996 and 1995. ---------------------------------------------------------------------- OPERATING RESULTS OUTSIDE OF THE U.S. First Quarters 1996 1995 ---------------------------------------------------------------------- Percent increase Sales 17 30 Revenues 20 33 Operating income excluding noncash accounting charge 15 38 ---------------------------------------------------------------------- As a percent of sales/revenues Company-operated margins 18.5 19.9 Franchised margins 81.1 81.0 ----------------------------------------------------------------------
Of the fifteen largest international markets, the following had strong sales and operating income for the first quarter 1996: Australia, Hong Kong, and Japan in Asia/Pacific; and Austria, England, France, Germany, Spain and Sweden in Europe. In Latin America, Brazil continued to deliver strong comparable sales performance but government mandated increases in payroll costs negatively impacted Brazil's operating income. Results in Mexico continued to be weak due to its adverse economy and currency devaluation; however, we continue to believe this market offers long- term potential. Sales and operating income in Canada increased slightly despite slowing consumer spending and a weak economy. The increases in operating income outside of the U.S. were driven by higher combined operating margins resulting from expansion and higher comparable sales, partially offset by higher general, administrative & selling expenses. Operating income outside of the U.S. increased 15 percent excluding the $16 million noncash charge for the adoption of the accounting standard for asset impairment for restaurant sites in Mexico. The decline in Company-operated margins as a percent of sales reflected higher food & paper and occupancy & other operating costs. Payroll costs as a percent of sales were relatively flat. Brazil and Taiwan contributed the most to the decline in Company-operated margins as a percent of sales due to higher payroll costs in both markets and higher food & paper costs in Taiwan. While margins declined, both Brazil and Taiwan had strong comparable sales and market share increases. As a percent of sales, franchised margins remained relatively flat compared to 1995. IMPACT OF FOREIGN CURRENCIES ON REPORTED RESULTS While changing foreign currencies impact reported results, McDonald's lessens short-term cash exposures by primarily purchasing goods and services in local currencies, financing in local currencies and hedging foreign-denominated cash flows. The weakening of the Japanese Yen was the primary foreign currency change which had an impact on 1996 first quarter results. If exchange rates had remained at 1995 levels, results would have been as follows:
------------------------------------------------------------------------- FOREIGN CURRENCY IMPACT Dollars in millions First Quarter 1996 ------------------------------------------------------------------------- Reported Adjusted Adjustment Reported Adjusted ------------------------------------------------------------------------- Consolidated Systemwide sales $7,309.5 $7,362.6 $(53.1) 10% 10% Operating income* 578.5 579.4 (.9) 6 6 Net income* 312.3 312.4 (.1) 11 11 Outside of the U.S. Sales $3,586.7 $3,639.8 $(53.1) 17% 19% Operating income* 330.2 331.1 (.9) 15 15 ------------------------------------------------------------------------- * Excluding noncash accounting charge. NEW ACCOUNTING STANDARD - ASSET IMPAIRMENT The Company adopted Statement of Financial Accounting Standard No. 121, Accounting for the Impairment of Long-Lived Assets and for Long- Lived Assets to be Disposed of, in the first quarter 1996. This statement requires impairment losses be recognized for long-lived assets, whether these assets are held for disposal or continue to be used in operations, when indicators of impairment are present and the fair value of assets are estimated to be less than carrying amounts. The fair value of assets was based on projected future cash flows. The adoption of this standard resulted in a $16 million noncash pre- tax charge in first quarter 1996 other operating (income) expense, equivalent to 2 cents per common share, related to restaurant sites in Mexico.
<TABLE> <CAPTION> FIRST QUARTER HIGHLIGHTS OPERATING RESULTS ------------------------------------------------------------------------- Dollars in millions, except Quarters Ended per common share data March 31 1996 1995 ------------------------------------------------------------------------- <S> <C> <C> Systemwide Sales $7,309.5 $6,671.6 ------------------------------------------------------------------------- U.S. sales $3,722.8 $3,604.6 Operated by franchisees 2,884.7 2,836.0 Operated by the Company 640.0 622.3 Operated by affiliates 198.1 146.3 ------------------------------------------------------------------------- Sales outside of the U.S. $3,586.7 $3,067.0 Operated by franchisees 1,686.3 1,450.0 Operated by the Company 1,073.8 889.3 Operated by affiliates 826.6 727.7 ------------------------------------------------------------------------- Total Revenues $2,426.0 $2,161.3 U.S. 1,053.0 1,013.9 Outside of the U.S. 1,373.0 1,147.4 ------------------------------------------------------------------------- Operating Income $ 562.5 $ 546.7 U.S. 259.2 269.4 Outside of the U.S.* 314.2 288.1 Corporate (10.9) (10.8) ------------------------------------------------------------------------- Income before provision for income taxes* $ 452.1 $ 435.1 Net income* 301.6 280.7 Net income per common share .42 .39 ------------------------------------------------------------------------- Cash provided by operations $ 474.4 $ 405.8 ------------------------------------------------------------------------- * Including the effect of the 1996 noncash charge related to the adoption of SFAS No. 121. </TABLE>
<TABLE> <CAPTION> RESTAURANTS ------------------------------------------------------------------------- At March 31, 1996 1995 ------------------------------------------------------------------------- <S> <C> <C> Systemwide restaurants 18,696 16,253 ------------------------------------------------------------------------- Traditional U.S. restaurants 10,403 9,795 Operated by franchisees 8,196 7,813 Operated by the Company 1,641 1,563 Operated by affiliates 566 419 ------------------------------------------------------------------------- Traditional Restaurants outside of the U.S. 6,611 5,575 Operated by franchisees 3,121 2,664 Operated by the Company 1,973 1,580 Operated by affiliates 1,517 1,331 ------------------------------------------------------------------------- Satellite restaurants 1,682 883 U.S. 1,094 603 Outside U.S. 588 280 ------------------------------------------------------------------------- </TABLE>
PART II Item 6. Exhibits and Reports on Form 8-K ----------------------------------------- (a) - Exhibits -------------- Exhibit Number Description -------------- ----------- (3) Restated Certificate of Incorporation and By-Laws, dated as of November 15, 1994, incorporated herein by reference from Exhibit 3 of Form 10-K for the year ended December 31, 1994. (4) Instruments defining the rights of security holders, including indentures (A): (a) Debt Securities. Indenture dated as of March 1, 1987 incorporated herein by reference from Exhibit 4(a) of Form S-3 Registration Statement, SEC file no. 33-12364. (i) Supplemental Indenture No. 5 incorporated herein by reference from Exhibit (4) of Form 8-K dated January 23, 1989. (ii) Medium-Term Notes, Series B, due from nine months to 30 years from Date of Issue. Supplemental Indenture No. 12 incorporated herein by reference from Exhibit (4) of Form 8-K dated August 18, 1989 and Forms of Medium-Term Notes, Series B, incorporated herein by reference from Exhibit (4)(b) of Form 8-K dated September 14, 1989. (iii) Medium-Term Notes, Series C, due from nine months to 30 years from Date of Issue. Form of Supplemental Indenture No. 15 incorporated herein by reference from Exhibit 4(b) of Form S-3 Registration Statement, SEC file no. 33-34762 dated May 14, 1990. (iv) Medium-Term Notes, Series C, due from nine months (U.S. Issue)/184 days (Euro Issue) to 30 years from Date of Issue. Amended and restated Supplemental Indenture No. 16 incorporated herein by reference from Exhibit (4) of Form 10-Q for the period ended March 31, 1991. (v) 8-7/8% Debentures due 2011. Supplemental Indenture No. 17 incorporated herein by reference from Exhibit (4) of Form 8-K dated April 22, 1991.
Exhibit Number Description -------------- ----------- (vi) Medium-Term Notes, Series D, due from nine months (U.S. Issue)/184 days (Euro Issue) to 60 years from Date of Issue. Supplemental Indenture No. 18 incorporated herein by reference from Exhibit 4(b) of Form S-3 Registration Statement, SEC file no. 33-42642 dated September 10, 1991. (vii) 7-3/8% Notes due July 15, 2002. Form of Supplemental Indenture No. 19 incorporated herein by reference from Exhibit (4) of Form 8-K dated July 10, 1992. (viii) 6-3/4% Notes due February 15, 2003. Form of Supplemental Indenture No. 20 incorporated herein by reference from Exhibit (4) of Form 8-K dated March 1, 1993. (ix) 7-3/8% Debentures due July 15, 2033. Form of Supplemental Indenture No. 21 incorporated herein by reference from Exhibit (4)(a) of Form 8-K dated July 15, 1993. (x) Medium-Term Notes, Series E, due from nine months to 60 years from date of issue. Form of Supplemental Indenture No. 22, incorporated herein by reference from Exhibit (4) of Form 10-Q for the period ended June 30, 1995. (xi) 6-5/8% Notes due September 1, 2005. Form of Supplemental Indenture No. 23 incorporated herein by reference from Exhibit 4(a) of Form 8-K dated September 5, 1995. (xii) 7.05% Debentures due 2025. Form of Supplemental Indenture No. 24 incorporated herein by reference from Exhibit (4)(a) of Form 8-K dated November 13, 1995. (b) Form of Deposit Agreement dated as of November 25, 1992 by and between McDonald's Corporation, First Chicago Trust Company of New York, as Depositary, and the Holders from time to time of the Depositary Receipts. (c) Rights Agreement dated as of December 13, 1988 between McDonald's Corporation and The First National Bank of Chicago, incorporated herein by reference from Exhibit 1 of Form 8-K dated December 23, 1988.
Exhibit Number Description -------------- ----------- (i) Amendment No. 1 to Rights Agreement incorporated herein by reference from Exhibit 1 of Form 8-K dated May 25, 1989. (ii) Amendment No. 2 to Rights Agreement incorporated herein by reference from Exhibit 1 of Form 8-K dated July 25, 1990. (d) Indenture and Supplemental Indenture No. 1 dated as of September 8, 1989, between McDonald's Matching and Deferred Stock Ownership Trust, McDonald's Corporation and Pittsburgh National Bank in connection with SEC Registration Statement Nos. 33-28684 and 33-28684-01, incorporated herein by reference from Exhibit (4)(a) of Form 8-K dated September 14, 1989. (e) Form of Supplemental Indenture No. 2 dated as of April 1, 1991, supplemental to the Indenture between McDonald's Matching and Deferred Stock Ownership Trust, McDonald's Corporation and Pittsburgh National Bank in connection with SEC Registration Statement Nos. 33-28684 and 33-28684-01, incorporated herein by reference from Exhibit (4)(c) of Form 8-K dated March 22, 1991. (f) 8.35% Subordinated Deferrable Interest Debentures due 2025. Indenture incorporated herein by reference from Exhibit 99.1 of Schedule 13E-4/A Amendment No. 2 dated July 14, 1995. (10) Material Contracts (a) Directors' Stock Plan, as amended and restated, incorporated herein by reference from Form 10-K for the year ended December 31, 1994.* (b) Profit Sharing Program, as amended and restated, incorporated herein by reference from Form 10-K for the year ended December 31, 1995.* (c) McDonald's Supplemental Employee Benefit Equalization Plan, McDonald's Profit Sharing Program Equalization Plan and McDonald's 1989 Equalization Plan, as amended and restated, incorporated herein by reference from Form 10-K for the year ended December 31, 1995.* (d) 1975 Stock Ownership Option Plan, as amended and restated.*
Exhibit Number Description -------------- ----------- (e) 1992 Stock Ownership Incentive Plan, incorporated herein by reference from Exhibit B on pages 29-41 of McDonald's 1995 Proxy Statement and Notice of 1995 Annual Meeting of Shareholders dated April 12, 1995.* (f) McDonald's Corporation Deferred Incentive Plan, incorporated herein by reference from Form 10-K for the year ended December 31, 1994, amendment filed herewith.* (g) Non-Employee Director Stock Option Plan, incorporated by reference from Exhibit A on pages 25-28 of McDonald's 1995 Proxy Statement and Notice of 1995 Annual Meeting of Shareholders dated April 12, 1995.* (11) Statement re: Computation of per share earnings. (12) Statement re: Computation of ratios. (27) Financial Data Schedule -------------------- * Denotes compensatory plan. (A) Other instruments defining the rights of holders of long-term debt of the registrant and all of its subsidiaries for which consolidated financial statements are required to be filed and which are not required to be registered with the Securities and Exchange Commission, are not included herein as the securities authorized under these instruments, individually, do not exceed 10% of the total assets of the registrant and its subsidiaries on a consolidated basis. An agreement to furnish a copy of any such instruments to the Securities and Exchange Commission upon request has been filed with the Commission. (b) Reports on Form 8-K The following reports on Form 8-K were filed for the last quarter covered by this report, and subsequently up to May 9, 1996. Financial Statements Date of Report Item Number Required to be Filed -------------- ----------- -------------------- 01/25/96 Item 7 No 04/22/96 Item 7 No
Signature ----------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. McDONALD'S CORPORATION (Registrant) By /s/ Jack M. Greenberg ------------------------- (Signature) Jack M. Greenberg Vice Chairman, Chief Financial Officer May 9, 1996 ----------------- (Date)