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McDonald's Reports Another Strong Quarter; June Marks 50th Consecutive Month of Positive Global Comparable Sales

- Global comparable sales up 8.4% in June, 7.4% in the quarter

- The U.S., Europe and Asia/Pacific, Middle East & Africa posted strong comparable sales growth: U.S. up 4.2% in June, 5.0% for the quarter; Europe up 11.1% in June, 7.8% for the quarter; Asia/Pacific, Middle East and Africa up 12.1% in June, 10.9% for th

- The impact of the previously announced developmental license transaction in 18 countries in Latin America and the Caribbean (Latam) will result in a net loss per share of about $0.60 for the second quarter 2007

- Excluding the $1.31 per share impact from the Latam transaction, second quarter 2007 earnings per share from continuing operations is expected to be approximately $0.71. Second quarter 2006 earnings per share from continuing operations were $0.56

Jul 16, 2007

McDonald's Corporation announced today that global comparable sales rose 8.4% in June and 7.4% in the second quarter. Systemwide sales for McDonald's restaurants worldwide increased 12.5% for the month (9.7% in constant currencies) and 11.4% for the quarter (8.6% in constant currencies).

McDonald's Chief Executive Officer Jim Skinner said, "These strong results -- our best quarterly comparable sales growth in three years -- reflect our ongoing momentum and commitment to customers. To intensify this customer focus and continue to drive long-term results, we're maximizing our asset base and ownership structure through actions such as the previously announced developmental license transaction in Latin America. This strategic transaction optimizes our opportunity to participate in Latin America's future growth potential."

U.S. comparable sales rose 4.2% in June due to the ongoing strength of the Company's breakfast business and the everyday value and variety the McDonald's menu offers. In Europe, robust results throughout the segment including France, the U.K. and Germany, fueled June's 11.1% comparable sales increase. In Asia/Pacific, Middle East and Africa, comparable sales were up 12.1% driven by strong sales growth in Japan, Australia and China and most other markets.

  Percent Inc                  Comparable          Systemwide Sales
                                  Sales               As    Constant
  Month ended June 30,        2007    2006      Reported    Currency
  McDonald's Restaurants*      8.4     5.9          12.5         9.7
  Major Segments:
    U.S.                       4.2     5.2           5.0         5.0
    Europe                    11.1     4.5          18.9        12.0
    APMEA**                   12.1     8.8          17.1        15.4

  Quarter ended June 30,
  McDonald's Restaurants*      7.4     5.5          11.4         8.6
  Major Segments:
    U.S.                       5.0     4.2           5.8         5.8
    Europe                     7.8     6.3          16.8         8.8
    APMEA**                   10.9     7.2          15.3        13.9

  Year-To-Date June 30,
  McDonald's Restaurants*      6.9     5.4          10.9         8.1
  Major Segments:
    U.S.                       4.7     5.4           5.5         5.5
    Europe                     7.9     4.1          17.8         8.9
    APMEA**                    9.7     5.6          13.7        12.5
       * Excludes non-McDonald's brands
      ** Asia/Pacific, Middle East and Africa

  Earnings Per Share

The $1.31 per share impact of the previously announced sale of the Company's existing businesses in 18 countries in Latin America and the Caribbean (Latam) to a developmental licensee organization consists of an impairment charge of $1.33, partly offset by a $0.02 benefit related to eliminating depreciation on the assets in these markets in mid-April 2007 in accordance with accounting rules. As a result of this transaction, the Company expects a net loss per share of about $0.60 for the second quarter 2007.

Excluding this impact, earnings per share will be approximately $0.71, reflecting a 34.2% effective income tax rate. In addition, foreign currency translation is expected to have a positive impact of $0.02 per share for the quarter.

Second quarter 2006 earnings per share of $0.67 included $0.11 of income from discontinued operations related to Chipotle Mexican Grill and $0.56 of income from continuing operations.

Presented below are reconciliations of the Company's reported earnings (loss) per share to adjusted earnings per share for the quarters ended June 30, 2007 and 2006, and the effective income tax rate for the quarter ended June 30, 2007. While the Company has previously converted certain other markets to a developmental license structure, management believes the Latam transaction and the associated charge are not indicative of ongoing operations due to the size and scope of the transaction. Management believes that the adjusted results better reflect the underlying business trends relevant to the periods presented.

  Earnings per Share Reconciliation                                   Inc/
  Quarters ended June 30,                             2007    2006*  (Dec)
  Earnings(loss) per share-diluted, as reported     ($0.60)  $0.67     n/m
  Earnings per share from discontinued operations           ($0.11)
  Earnings(loss) per share
     from continuing operations                     ($0.60)  $0.56     n/m
  Impact of Latam transaction**                      $1.31
  Adjusted earnings per share-diluted                $0.71   $0.56     27%
   * Includes $0.02 of expense primarily due to impairment charges and the
     one-time impact of a tax law change in Canada.
  ** Reflects $1.33 of impairment expense, partly offset by a $0.02 benefit
     due to eliminating depreciation in mid-April 2007 on assets in the
     18 countries in Latin America and the Caribbean included in this

   Effective Income Tax Rate Reconciliation           Impact of   Excluding
   Quarter ended June 30, 2007                   As       Latam       Latam
   Dollars in millions                     Reported Transaction Transaction
   Income(loss) from continuing operations
      before provision for income taxes     ($272.1) ($1,594.4)    $1,322.3
   Provision(benefit) for income taxes       $439.6     ($12.8)      $452.4
   Income(loss) from continuing operations  ($711.7) ($1,581.6)      $869.9
   Effective income tax rate                    n/m        n/m        34.2%
   n/m  Not meaningful

  -- Comparable sales represent sales at all McDonald's restaurants in
     operation at least thirteen months including those temporarily closed,
     excluding the impact of currency translation.  Some of the reasons
     restaurants may be temporarily closed include road construction,
     reimaging or remodeling, and natural disasters.  Management reviews the
     increase or decrease in comparable sales compared with the same period
     in the prior year to assess business trends.
  -- Information in constant currency is calculated by translating current
     year results at prior year average exchange rates.
  -- Systemwide sales include sales at all McDonald's restaurants, including
     those operated by the Company, franchisees and affiliates.  Management
     believes Systemwide sales information is useful in analyzing the
     Company's revenues because franchisees and affiliates pay rent and/or
     royalties that generally are based on a percent of sales with specified
     minimum rent payments.
  -- The number of weekdays, weekend days and timing of holidays can impact
     our reported comparable sales.  For the month of June 2007, this
     calendar shift/trading day adjustment consisted of one more Saturday
     and one less Thursday compared with June 2006.  The resulting
     adjustment varied around the world, ranging from approximately positive
     0.4% to 1.9%.

  Upcoming Communications

McDonald's tentatively plans to release second quarter results before the market opens on July 24, 2007, and will host an investor webcast at 10:30 a.m. Central Time. A link to the live and archived webcast will be available on

McDonald's tentatively plans to release July sales on August 8, 2007.

McDonald's is the leading global foodservice retailer with more than 30,000 local restaurants in more than 100 countries. More than 70% of McDonald's restaurants worldwide are owned and operated by independent local men and women. Please visit our website at to learn more about the Company.

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.

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SOURCE: McDonald's Corporation

CONTACT: Investors, Mary Kay Shaw, +1-630-623-7559, or Media, Heidi
Barker, +1-630-623-3791, both of McDonald's Corporation

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