Pershing Square Activist Presentation Deck
II. Pershing's View of McDonald's
Set forth below is a table which reconciles McOpCo's, the Real Estate and Franchise businesses' and stand-alone
McDonald's FY 2004A income statements, assuming McOpCo pays a market rent and franchise fee. The analysis
demonstrates that the Real Estate and Franchise business contributed approximately 78% of total EBITDA.
(U.S. $ in millions)
Sales by Company Operated Restaurants
Rent from Franchise and Affiliate Rest.
Rent From Company Operated Rest.
Franchise Fees From Franchise and Affiliate Rest.
Franchise Fees From Company Operated Rest.
Total Revenue
Company Operated Expenses:
Food and Paper
Compensation & Benefits
Non-Rent Occupancy and Other Expenses (excl. D&A)
Company Operated D&A
Company-Operated Rent Expense
Additional Rent Payable to PropCo
Franchise Fee Payable to FranCo
Total Company Operated Expenses
Franchised Restaurant Occupancy Costs
Franchise PPE D&A
Corporate G&A
EBIT
Reconciling McDonald's 2004A P&L
Depreciation & Amortization
EBITDA
% of Total EBITDA
2004
Income Statement
$14,224
3,336
1,505
$19,065
4,853
3,726
2,164
774
583
$12,100
576
427
1,980
3,982
1,201
$5,183
100%
Real Estate
McOpCo and Franchise
P&L
P&L
$14,224
$14,224
4,853
3,726
2,164
427
583
697
569
$13,019
'
495
710
427
$1,137
22%
3,336
1,280
1,505
569
$6,690
347
583
$930
576
427
1,485
3,272
774
$4,046
78%
Inter-Company
Eliminations
(1,280)
(569)
($1,849)
(583)
(697)
(569)
($1,849)
$0
2004
Consolidated
Sum of Parts
$14,224
3,336
1,505
$19,065
4,853
3,726
2,164
774
583
$12,100
576
427
1,980
3,982
1,201
$5,183
100%
The analysis assumes that 75% of the total G&A is allocated to the Real Estate and Franchise business and 25% is allocated to McOpCo. McDonald's management has
indicated this is a conservative assumption regarding the real estate and franchise business.
Note: Analysis excludes $441 mm of non-recurring other net operating expenses. 17
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