McDonald's Corporation Reaffirms EPS Growth Targets and Clarifies Potential Impact of Foreign Currency Translation on Reported Earnings

Mike Conley, Executive Vice President and Chief Financial Officer, McDonald's Corporation, said, "We reaffirm our previously stated long-term objective to grow earnings per share 10 to 15 percent annually through 2002, excluding the impact of foreign currency translation. We will be disappointed if our earnings per share growth this year, excluding the impact of foreign currency translation, isn't at the mid-point or better of this long-term growth objective.

"Given the well-reported recent weakening in several foreign currencies, we believe our reported earnings per share for 2000 could be negatively impacted by an additional two cents, for a total of seven cents for the year, by foreign currency translation. While seven cents is our best estimate of the full-year impact at this time, it may change as the various currencies fluctuate against the U.S. Dollar. However, since we do not include the impact of foreign currency translation in our projections, our long-term earnings growth objective has not changed."

Jack Greenberg, Chairman and Chief Executive Officer, said, "While we lessen currency exposures, where practical, by financing in local currencies, hedging certain foreign-denominated cash flows and purchasing goods and services in local currencies, McDonald's reported earnings, like those of other global businesses, are affected by fluctuations in foreign currencies. Importantly, the fundamentals of our business haven't changed. Our global business remains solid and growing. In the U.S., improvements in our business are beginning to show positive results in customer attitudes and food sales trends. Outside the U.S., we continue to build on our leading market position in virtually every country in which we do business. With an ongoing focus on running great restaurants, I am confident we will continue to drive our business forward."

As announced earlier today, Systemwide sales for August 2000 were $3,596 million, an increase of 8 percent on a constant currency basis* compared with August 1999. For the first eight months of 2000, Systemwide sales were $26,974 million, reflecting a 7 percent constant currency increase.

McDonald's Corporation is the largest and best-known food service retailer with over 28,000 restaurants serving more than 43 million people a day in 119 countries.

Certain forward-looking statements are included in this release. They use such words as "may," "will," "expect," "believe," "plan" and other similar terminology. These statements reflect management's current expectations and involve a number of risks and uncertainties. Actual results could differ materially due to 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 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.

*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.

SOURCE: McDonald's Corporation

Contact: Investors, Mary Healy, 630-623-6429, or Media, Anna Rozenich,
630-623-7316, both of McDonald's Corporation