Pershing Square Activist Presentation Deck
V. Developing a Response to the
Company
Scenario 1:
No Sharebuyback
No Incremental
Leverage
Scenario 2
Proposed
Sharebuyback
McDonald's Stock Price
McOpCo Stock Price
PF McDonald's Stock Price
Pre-Tax Yield (1)
After-Tax Investor Yield
Which Would You Rather Own:
Pro Forma McDonald's or a Treasury Inflation
Protected Security (TIPS)?
(2)
Estimated LT Dividend Growth
After-Tax Investor Yield
PF McDonald's Stock Price
Pre-Tax Yield (3)
(3)
Estimated LT Dividend Growth
$33.15 $35.15 $40.15 $45.15 $50.15 $55.15
5.15 5.15 5.15 5.15 5.15
$30.00 $35.00 $40.00 $45.00 $50.00
5.15
$28.00
6.7%
5.7%
5.9% 5.2% 4.7% 4.3%
7.2%
5.0%
4.4% 4.0%
Note: Assumes a 7x EV /FY '06E EBITDA multiple on McOpCo.
(1)
Assumes full payout of free cash flows for PF McDonald's.
(2)
Assumes 15% tax rate on PF McDonald's dividend and a 35% tax rate on the TIPS dividend.
(3)
Scenario 2 Pre-Tax and After-Tax Yields are adjusted for a 35% stake in McOpCo.
3% -4%
6.7% 5.7%
54
$28.00 $30.00 $35.00 $40.00 $45.00 $50.00
7.9% 6.7% 5.8% 5.1% 4.6%
8.5%
3.6%
3% -4%
3.9%
3.3%
4.9% 4.3% 3.9%
$60.15
5.15
$55.00
3.6%
3.1%
$55.00
4.1%
3.5%
10 Year
TIPS
2.1%
3.0%
2.5%View entire presentation