Pershing Square Activist Presentation Deck
V. Developing a Response to the
Company
At McDonald's current price of approximately $33 per share, we estimate Pro Forma McDonald's dividend
/ FCF yield would be approximately 6.7%. (1)
McDonald's Stock Price
McOpCo Share Price (7x EV / EBITDA Multiple)
Implied Pro Forma McDonald's Share Price
Yield on Pro Forma McDonald's
Memo: Pro Forma McDonald's Free Cash Flow
2006E EBITDA
Less: Maintenance Capital Expenditures
Less: Growth Capital Expenditures
Plus / Less: Decreases / (Increases) in Working Capital
Significant Free Cash Flow Yield / Dividend Yield
Assuming No Incremental Debt
Less: Interest (1)
Less: Cash Taxes
Free Cash Flow
PFMcDonald's Shares Out (assuming no self-tender)
Free Cash Flow per Share
$4,464.0
(438.6)
(285.9)
6.2
250.0)
(1,112.7)
$2,383.0
1,273.7
$1.87
$33.00 $37.00 $41.00 $45.00 $49.00 $53.00 $57.00
$5.15 $5.15 $5.15 $5.15 $5.15 $5.15 $5.15
27.85 31.85 35.85 39.85 43.85 47.85 51.85
6.7% 5.9%
5.2%
(1) Assuming PF McDonald's pays out 100% of its FCF as dividends.
(2) Assumes no incremental leverage and an average cost of debt of 5% on the existing $5 bn of net debt at Pro Forma McDonald's.
50
4.7% 4.3% 3.9%
3.6%View entire presentation