Coke, ford and earning all vernings beats. The deal that were to happen would be worth well lets call it 2,515 billion comcast should buy verizon we did get an update erngs report from at t. Mcdonalds expanding its Delivery ProgramSteve Easterbrook is here in the house and will join us live at post nine to discuss the 787, the orders are amazing. This is a company with just a level of cash flow that people were surprised by. A couple of quarters last when people got very kpietd aexcited Conference Call began and the air went out of the balloon and thats not going to happen this time and the operating cash flow which is what i think has been the hall mark of this whole quarter. Revenue growth instead. The previous ceo was fan fantastic. He is talking about a new product. And remember its been going down when i talked to him this morning i felt terrific about it by the way, we talked about the value dollar, cocacola at mcdonalds and howell thats done i had to of course talk to mr. Easterbrook. Couldnt resist but at the same time he is committed to being soft drink and water hes committed to being beverage. I asked him, you have the fire power now because you have done this refranchising you have a fabulous Balance Sheet is it time to move out of beverage no, no, and no and i tried to get him to go in a pepsico way he is going to make acquisitions and youre going to see them rather quickly david hopefully when youre in but i do think that. What do you mean . They took that stake in green mountain. Monster as well. This was not my i said is it time to go outside of beverage and he said oh, no its going to be within the beverage family. Want to be more diverse identified but even theyre not doing as badly because of this new form i mean the business is going to generate a lot of cash flow. The guy has a lot of chances to do a lot of Different Things i believe he gave him a great hand should the stock be bought on this its not a quarter like a mcdonalds its not a quarter thats like a boeing but people are still i like dominos here. But dominos had very weak uk how about mcdonalds having the best in 43 years so it isnt like that. Somebody is taking share from somebody. Were going to talk to easterbrook in a few moments ford is the other big one at the moment there is some tax in there although pick up sales were strong. I looked at ford and i was thinking, got out of europe in the bottom and then i look at fords numbers in europe and theyre not there. Saved by the truck i just wish i had something more positive to say about ford but i dont think it matters who is running it right now you want to kill your story, have her be your ceo. Shes a downer, huh i had the largest Parts Company on he does a lot of work with gm hes talk about good numbers overseas and things are okay but then its like okay lets get some campbells soup and Peanut Butter and be able to last for a long time i read that and i said she is prepared for the apocalypse. This is a company, these two companies, their narratives are so negative that i almost believed that were done buying cars or that maybe its an electric car situation or economist driving and people are waiting for those. It is a pause. Except for trucks and thats the Small Business thats doing better. U. K. Also, right . 2040 now getting rid of the combustible engine that was going to drive the oil futures down but last night we had a big draw down but thats going to be were going to deal with oil as a declining prospect now still 81 of the world is fossil fuel as it was 20 years ago but if you mandate it, well then youre going to have to start thinking i got to own a tesla. Its going to happen in 23 years one would expect he does continue to say after consultation the u. S. Government will not accept or allow transgender stroijs serve in any capacity in the u. S. Military. Our military must be focused on decisive and overwhelming still waiting on part 3 here but thats what the mystery was for a good ten minutes or so well i have a specific comment about that and i thought it blew the numbers away. Thats where we are moving on to at t they lost 199,000 subs but t city arguing that comcast should buy verizon. You heard david mention the size it would be. Their argument is gets you beyond the home. They argue the Regulatory Environment is more amenable than pass administrations. You cant dismiss Something Like that. A descent analyst. The barclays analyst also mentioned Something Like this. That guy predicted at t time warner i was looking back to my notes jim. Thats months ago. Would it ever happen he puts a 65 chance on it. Could he have done the same thing with tmobile. Yeah, verizon is challenged in a lot of different ways at t the earnings the stock sup. Its a good quarter. It was a good quarter. While were talk about this. Did you see at one point he said that people want game of thrones on their hand held maybe the more visionary than i thought. The bundling does seem to be working. Churn was low and directv now added 152,000 subs which is offsetting the declines at directv itself. There say belief that bundling is helping reduce churn which is a basic idea there. It was okay take a look at what we have done it made me feel good about time warner i see what they have got going theyre about getting subs from others using intellectual property as opposed to magenta they want to create stickiness with the things they can offer you from a certain extent. Nobody is talk about walling off hbo. Back to comcast verizon, well see. Theres a lot of verizon as we know is challenged on the top line what will it do . Will it do a large deal . Would it ever consider selling and would our Parent Company want to get that much bigger you can make arguments that it makes sense even on the economics of it there are ways to get to the number that makes sense. The fact that this guy says theres a 65 likelihood. Would you argue that 65 is kind of like code for it could be 48 . By the way. 67. I would have gone 67. Dish is now lower to a 30 chance of verizon by that and is lower to a sell. Come on we should probably go. Yeah. We do have to go because we want to make time for the ceo of mcdonalds Steve Easterbrook is with us here on post nine. Well talk earnings and more plus jim got an exclusive with the head of citigroup after holding his First Investor day since the crisis well hear sound from that in advance of mad money tonight nasdaq is up 12 of 13. Dow needs 68 points at the open for an all time high were back in a minute experience advanced Safety Technology at the lexus golden opportunity sales event before it ends. Choose from the is turbo, es 350 or nx turbo for 299 a month for 36 months if you lease now. Experience amazing at your lexus dealer. It is great to have you back. Thank you, good morning. Last time you were here we talked about increasing guest count and youre doing it even as some of the initiatives are literally getting off the ground. It is early days but we always said the fundamental measure of success is serving more customers more often so initially 8 quarters of growth its just fantastic but really its underpinned by resinating the customers in a more meaningful way and we have begun to do that. People talk about discounts on beverages upscale burgers. Are any of those more important than the other its a combination of all of the above and more we have been investing in the menu and ingredients and food and quality taste. We lost our way on value so getting a great value to drive customers in but part of what is important behind that is you want to drive customers in as they actually see the differences. Whether its in staff and training and the Service Although its in the physical real estate youre the president and youre the leader but you have this congress and you have to work to get them to buy in. How did you do that so quickly and tell people what it means when you have the buy in versus when you dont. What we have to do is instill some trust, some excitement, some confidence. Confidence in our leadership and as they invest themselves theres opportunities for them that takes a lot of collaboration and we invest a lot of time in that. As the momentum grows the confidence fwr confidence grows and as confidence grows this mojo returns and its a spirit within that makes us more confident to continue doing what were doing. On your Conference Call we have to recognize that this is also a Technology Company that serves burgers you use this term. Tell us what it is. So eotf is experience of the future and i guess simply put is how do we give customers more choice on what they order, how they order, how they pay, Technology Helps some of that. We have 120 kruns around the world. Not everything has to start in the u. S. And sometimes you can use smaller markets that are more agile and you can learn quickly so we decided to roll out this experience in the future right across the market 4 or 500 restaurant market and the learnings you can transfer quickly so as we start to develop that here in the u. S. We have a head start. We know what works we know what doesnt work and we can come out stronger and faster. You talked about if 10 of our customers share their data being able to track them around the world, how far along, this is the early, early days for that. We talk about being customer obsessed and we are when customers visit the restaurant put we dont have the oneonone connectivity which Digital Technology allows you these days were bringing in loyalty features and trying to bring more features that are useful to customers to even make their experience friendlier more convenient and more fun and when you do that they share more of their information with you and our ability to be meaningful to customers is so much more enhanced when we understand their habits and their Family Structures were just about to launch a new happy meal we can send monotifications and let them know that the minions happy meal is coming up or something is launching tomorrow. They like to be in the know. Customers perceive value out of that so we need to build that very very aggressively. We talked to ed yesterday and asked about delivery he said makes a lot of sense but theres a challenge in making sure that the food travels. Absolutely. No one is more pressure about the quality of the food than we are. We have a couple of restaurants in miami our own quality scores and response to customers was really strong and i think part of our advantage, one operationally we can prepare the food and that get that prepared really quickly but one of the interesting stats because of our scale is 75 of the population. We have lots more to learn and progress but initially response is strong we now have more than 8,000 restaurants around the world on delivery. Everybody wants to do mobile pay and they want to do it big and now starbucks is going to report later this week theyre going to do 2 to 3 sales. Yeah there is i think part is we won the first with this and we can spend that time integrating the consumer technolo technologying with basically the kitchen so we know that operationally we can deliver those at the same speed and at the same quality it took us a little bit of time to get all of that connectivity working through to the mobile app but we feel pretty confident it will be smooth. Generationally, why dont they change the whole world and become organic wouldnt you wreck the whole food chain if tomorrow you decide to be organic. What we want is great quality and great value. Thats fundamentally what were about. Customers do appreciate it for the early stage here in the u. S. Customers dont necessarily want to pay more for that. We appreciate that were making the effort they appreciate that were making the effort on their behalf so we will continue on that Continuous Improvement through the core ingredients great quality at affordable prices. That 6. 6 number took some people by surprise given how strong it was and on the Conference Call you believe youre in a position to continue to accelerate your growth. You believe you can get numbers that exceed even that which exceeded even the optimistic forecast. If you look over an annual basis a big company like us typically 2 to 3 to 4 would be acceptable we challenge ourselves of how can we get that normal organic growth and layer on the other platforms of growth on top we think technology and delivery and in the u. S. In particular we still need modernization how long is the cycle of growth were already looking at the future pipelines so we dont want the challenge to end. Make sure that you dont end up getting into a cyclical thing we have a great period of time and then the pipeline dried up a bit and i have a responsibility to make sure that we keep innovating and challenging ourselves and making sure that the ideas dont dry up. Where do you think the share is coming from is it eating at home its a combination of things. We know were winning share against the nearing competition so thats our confidence that were getting our base ix right and Winning Customer hearts and minds. Theres an equalization between food at home and food away from home it was actually more affordable and its beginning to balance out as well. So theres macro elements and its the nuts and bolts of getting the basics right for us. Something going on bigger than that steve. When you have the best number in 43 years in britain something is going on some shift its bigger than just taking share from a wendys what do you think it is . Is it some sort of millennial shift . Something is happening bigger than what you talked about. When your a consumer facing business like we are, often we have a body language and we have a confident body language and were embracing the culture change that were trying drivethru the business and theyre just giving it a go. Customers are recognizing more aggressive, more fun, more inspiring and theyll be continuing to make changes everything is learning from each other. Mcdonalds around the globe has always been a target, right . An icon of america for those that have problems with america. Sure. Is that any more acute now given sentiment about the u. S. Around the world theres always been geo political issue around the world. We aim to localize the business in every country that we operate. Local management, local owner operators local supply chains. Its the 20 that you localize that indicates to the consumers that we are part of that so we managed our way through and im confident were going to continue. Just quickly you mentioned something about packaging as a potential change down the world. What is a typical meal going to look like. It would be about maintaining the quality of the food. Lets say theres an 8 to 10 minute transportation time, innovate around packaging so at the moment were placing it in current existing packaging which isnt, is very good for immediate consumption we think that if anyone can innovate it should be us does the deliver ticket size need to be larger . It already is were seeing 1. 5 to 2 times our ordinary ticket side theres not a minimum order either its group ordering. Families together. Groups of friends, offices so by nature its higher. My kids were growing up, the bathrooms were the cleanest. That thing next time was clean but is there a directive did you do something because i hit one and the bathroom was spotless. I went in italy. The bathroom is spotless did you send a directive what were reminding ourselves is if each of us within the entire mcdonalds businesses focuses on what we should be good at. We look each in in the eye and we get this stuff out. When success comes with it its a fun time. Just got a couple of minutes left before we get the bell here got to ask your thoughts about amazonwhole foods. Okay. In what way was it a game changer. I think youre seeing a lot of Traditional Industries are getting disrupted by technologies you have a choice either be disruptor or disrupted. Its fun to do it doesnt make life easy but none of us are in this we want to make sure that we run our businesses its about the culture and view that culture of change and agility. Youre still doing difficult things you had a lobster sandwich in mcdonalds. Thats been in maine for a long time. A region anonymous product is hard to make people start making mistakes if its going to be the boston region theres 5 or 600 restaurants within that. This isnt just a 20 or 30 restaurant market. These are big businesses in their own right. It does resinate but localizing it is it complicated steve, thank you. Pleasure. Well see you next times. Opening bell here and the s p at the bottom of your screen at the big board today, focused on the washington d. C. Metro area focussing on the spin off and merger with that guys, mcdonalds year to date. Old dog, new trix its really incredible you mentioned something about a fly wheel once you start going and 6 this is a huge company we think if they can get 3 growth its extraordinary. It seems hard to imagine to that point. My friends they say, you know what, this guy gets it whatever it is, he used the word mojo again 232 beats by 14 cents. Some of those shorts off their heels. This was my plan. Ive always said 18 months and they forget and then we had that moro virus incident and of course the picture but this was the quarter where i thought things really started coming together and they have new things on the menu they figured out the labor costs are Getting Better do i want to say theyre back . No that could have been planted by shorts. The video of everybody to video everything and anything. When i asked other people about that they said well there by the grace of god but wow that really saved the day. Yeah i remember that. Record highs for all three indices. Amd is going to be your leader at the open. What a Conference Call. Revenue ahead, strong guy graphic chips. By the way, the analysts keep trying to get him they say youre mining bitcoin. Didnt throw the ceo off a bit thats not what theyre saying what are you hearing youre hearing that they have apple. Youre hearing that they have the xbox they have the best graphic user and you think to yourself holy cow, what is intel thinking . You have to promote for her. Today i learned