McDonald’s Corporation

Presented By:
Ardis Shannon
Adam Krupa
Jigar Patel
David Seid
Samuel George
 McDonald’s Mission
Be the best quick service restaurant
experience. By providing quality, service,
cleanliness and value that make every
customer in every restaurant smile.
 3 World wide strategies
 Bestemployer
 Operational Excellence
 Continue to grow and be profitable
 History
 1940 First McDonald’s • 1965 McDonald’s go
 1952 Attempts at public
franchising • 1968 Introduction of
 1954 Milk Shake Big Mac and shift to
Machine Network Television
 1955 prototype opens • 1970 1600 restaurants
in Des Plaines, IL • 1980 6000
 1956 14 McDonald’s McDonald’s
 1961 McDonald Restaurants
brothers sell rights • 1990 record sales
 History Continued

 1994 Kuwait City, Kuwait

 2002 Forty seven years after
– 30,000 locations
– 2000 new restaurants
– World Wide Web
– McDonald’s a recognized Brand
Name
 Recent
Acquisitions/Divestitures
 Boston Market
 Chipolte Mexican Grill
 Donato’s Pizza chain
 McCafe’
 Training
 Surpasses even the U.S. Army
 Provides career opportunities
 Service Enhancement Process
 Consistent through CD-ROMs
 ReHIREment
 Program established for mature workers
 Ease of transition of older workers returning
to the workforce.
 Flexible scheduling so as not to jeopardize
their Social Security benefits.
 More than 40,000 older workers serve
McDonald’s customers on any given day
 McJobs
 Assistance to employees with mental and
physical disabilities.
 More than 9,000 workers went through the
program.
 Given formal graduation ceremony
 Management
Development Programs
 Crew Development
 Restaurant Management
 Mid-Management
 Executive Development
 Hamburger University
 Management Training
Center
 Worldwide Education
Program
 Technology
 200 per class
 65,000 managers
graduated to date
 Women and Minorities
 Soars above stereotype of average fast-food
joint
 Compose more than 50 percent of
McDonald’s current workforce
 Featured as the “The Best Companies for
Minorities”
 Product Lines

 Hamburgers
 Chicken Sandwiches
 French Fries
 Beverages
 Breakfast Items
 Desserts
 Technology
 McDonald’s in Sweden
– World’s First Snowmobile Drive-Thru

 McDonald’s & ExxonMobil???

– Speedpass invades McDonald’s
 Industry Trends
 What is happening with fast food?
– People are more educated

 McDonald’s Responds
– America’s First McCafe
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 In Downtown Chicago b03cafe22

 Financial Agenda
• System Wide Sales

• McDonald’s Corporation Revenues

• Cash Flow

• Financial Ratios

• Stock Performance
System Wide Sales
In The Year 2000
$40.181 Billion
Company
Affiliated
operated
13%
Resturants
26%

Franchised
61%
 McDonald’s Corporation
Sales By Segment

Other
9%
Latin America
7%

U.S.
37%
Asia/Pacific
14%

Europe
33%
 Income
(in millions)
Net Net Earnings /
Revenues Income Share

$14,24 $1.49
$1.44
3
$1,947 $1,977
$13,25 $1.14
9
$1,550

$12,42
1

'98 '99 '00 '98 '99 '00 '98 '99 '00

 Cash Flow Statement
In (millions)
2000 1999

Net Income $1,977.3 $1,947.9

Net Cash Provided By Operating Activities $2,751.5 3,008.9
Net Cash Provided By Investing Activities (2,212.6) (2,261.8)
Net Cash Provided By Financing Activities (536.7) (626.8)

Cash and equivalents increase(decrease) $2.2 $120.3

Cash and equivalents at beginning of year $419.5 $299.2
Cash and Equivalents at end of year $421.7 $419.5
 Financial Ratios
Analysis McDonald Industry
P/E Ratio 21.42 25.49

Price to Sales 2.36 1.97

Price to Book 3.52 3.95

Quick Ratio 0.76 0.63

Inventory Turnover 109.28 32.44

Total Debt to Equity 0.89 0.64
Net Profit Margin 11.01 7.62
Return on Assets 7.54 8.67
Return on Investment 8.30 10.54
Return on Equity 17.62 17.65
Revenue/Employee 40,852 77,289
 Stock Performance
Mkt Cap 52-wk Range Last Trade
35.877B 24.75 - 31.00 Mar. 8 27.91
Making A Difference

We have an obligation to
give back to the
communities that give us so
much."
- Founder Ray Kroc, 1955
 Social Commitments
 “9-11” Relief Effort
 Environmental Concerns
 Educational Involvement
 Quality & Safety Procedures
 Ronald McDonald House
Charities (RHMC)
Stay Tuned …………
 Terence Haynes
Senior Vice President,
U.S. Controller

Native of South Africa

Education: Bachelor of Commerce

University of Witwatersand in Johannesburg

Prior Position: Chief Financial Officer in the U.K.