McDonald's Corp. (MCD) filed Quarterly Report for the period ended 2009-09-30.
McDonald's Corporation develops operates franchises and services a worldwide system of restaurants that prepare assemble package and sell a limited menu of value-priced foods. The company operates primarily in the quick-service hamburger restaurant business. All restaurants are operated by the company or under the terms of franchise arrangements by franchisees who are independent third parties or by affiliates operating under joint-venture agreements between the company and local business people. Mcdonald's Corp. has a market cap of $65.8 billion; its shares were traded at around $60.29 with a P/E ratio of 15.8 and P/S ratio of 2.7. The dividend yield of Mcdonald's Corp. stocks is 3.3%. Mcdonald's Corp. had an annual average earning growth of 7.2% over the past 10 years.
Highlight of Business Operations:
In 2009, the Company sold its minority ownership interest in Redbox Automated Retail, LLC (Redbox) to Coinstar, Inc., the majority owner, for total consideration of $139.8 million. In connection with the sale, in February, the Company received initial consideration valued at $51.6 million consisting of 1.5 million shares of Coinstar common stock at an agreed to value of $41.6 million and $10 million in cash with the balance of the purchase price deferred. In April, the Company sold all of its holdings in the Coinstar common stock for $46.8 million. In second quarter, the Company received $78.4 million in cash from Coinstar as deferred consideration, and in third quarter, the Company received $9.8 million in cash from Coinstar as final consideration.
As a result of the transaction, the Company recognized a nonoperating pretax gain of $0.6 million in the third quarter 2009 and $94.9 million for the nine months.
The Company remains committed to returning value to shareholders through share repurchases and dividends. During the third quarter 2009, the Company repurchased 13.6 million shares of its stock for $758.6 million, bringing the total repurchases for 2009 to 42.6 million shares or $2.4 billion. During the third quarter 2009, the Company paid a quarterly dividend of $0.50 per share or $541.2 million, bringing the total dividends paid for 2009 to $1.6 billion. For the full years 2007 and 2008 and first nine months of 2009 combined, the Company returned $15.6 billion to shareholders. The Company also declared a fourth quarter 2009 dividend of $0.55 per share, reflecting an increase of 10% over the third quarter. Including the fourth quarter 2009 dividend and share repurchases, the Company expects to end the year near the high end of its three-year, $15 billion to $17 billion total cash return target.
For the third quarter and nine months ended September 30, 2009, net income was $1,261.0 million and $3,334.2 million, respectively, and diluted net income per share was $1.15 and $3.00, respectively. Results for the nine months benefited by an after tax gain of $58.8 million or $0.05 per share related to the sale of the Company’s minority interest in Redbox. Results were negatively impacted due to the effect of foreign currency translation by $0.05 per share and $0.22 per share for the quarter and nine months, respectively.
For the third quarter and nine months ended September 2008, net income was $1,191.3 million and $3,327.9 million, respectively, and diluted net income per share was $1.05 and $2.89, respectively. Results for the nine months benefited by an after tax gain of $109.0 million or $0.09 per share due to the sale of the Company’s minority interest in Pret A Manger.
During the third quarter 2009, the Company repurchased 13.6 million shares of its stock for $758.6 million, bringing the total repurchases for 2009 to 42.6 million shares or $2.4 billion. During the third quarter 2009, the Company paid a quarterly dividend of $0.50 per share or $541.2 million, bringing the total dividends paid for 2009 to $1.6 billion. The Company also declared a fourth quarter 2009 dividend of $0.55 per share, reflecting an increase of 10% over the third quarter.
MCD is in the portfolios of Steve Mandel of Lone Pine Capital, Bill Ackman of Pershing Square Capital Management, L.P., Bill Gates of Bill & Melinda Gates Foundation Trust, Robert Olstein of Olstein Financial Alert Fund, Bill Nygren of Oak Mark Fund, Ken Heebner of CAPITAL GROWTH MANAGEMENT LP, Richard Perry of Perry Capital, David Winters of Wintergreen Advisors, Tom Gayner of Markel Gayner Asset Management Corp, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, Dodge & Cox, Ron Baron of Baron Funds, Richard Aster Jr of Meridian Fund.
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