News

McDonald's plans to return at least $18B to shareholders

May 29, 2014

McDonald’s CEO Don Thompson announced Wednesday that the company plans to return $18 billion to $20 billion to shareholders between 2014 and 2016, through a combination of dividends and share repurchases. This represents a 10- to 20-percent increase over the amount of cash returned from 2011-13. 

Additionally, according to a news release, McDonald’s plans to refranchise at least 1,500 restaurants by the end of 2016, primarily in Asia/Pacific, Middle East and Africa and Europe. This marks a 50-percent increase in refranchising activity compared with the prior three-year period.

The company also plans to analyze its G&A spending to look for reallocation opportunities such as digital initiatives.

"The actions we are taking to enhance long-term shareholder value fit squarely within our proven business model," CFO Pete Bensen said in the release. "Our three-year cash return target is based on several activities including the significant free cash flow generated from our operations, as well as the use of cash proceeds from our debt additions and refranchising activity. Financial discipline has always been a cornerstone of McDonald's strategic plan, and we will pursue these activities while maintaining appropriate levels of financial flexibility, liquidity and access to capital for the company." 

After these announcements were made, CNBC’s Jim Cramer accused the company of trying to create a distraction from its flat earnings performances as of late.