Pershing Square Activist Presentation Deck
Appendix
For modeling
purposes, we have
assumed a 20% IPO
of McOpCo and the
proposed share
repurchases occurred
on 12/31/2005. In
addition to our IPO
assumptions, set forth
herein are
assumptions
regarding share
repurchases, capital
structure and dividend
policy.
Final Revised Proposal.ppt
Revised Proposal: Preliminary Transaction
Assumptions
IPO assumptions
► 20% IPO of McOpCo generates $1.25bn of cash proceeds after expenses (on 12/31/2005)
■ Assumes a 7x EV/'06E EBITDA multiple for McOpCo
No taxes paid given McOpCo's basis which is assumed to be approx. $1.65bn
Tax basis is equal to $3 billion of initial assumed basis (based on an assessment of
net equipment and other property at McDonald's) less $1.35 billion of net debt
Share repurchases
Approximately 7% of the share base repurchased using
~ $1.75bn of expected cash on hand at the end of the year (after paying dividends)
~ $1.25bn of IPO proceeds, net of fees
Capital structure post share repurchases
Per management guidance, assumes McDonald's issues a $3bn term loan to repatriate
foreign earnings
No incremental debt issued at McDonald's over total debt at 9/30/2005 ($8.1bn),
excluding a $3bn term loan required to repatriate earnings
Assumes FY'05E Net Debt at consolidated McDonald's of $8.1bn
■ FY'05E Total Debt of $11.1bn, which includes $3bn of debt required for the
repatriation of foreign earnings
■ FY'05E cash balance of $3bn, based on proceeds received from repatriation
Increase dividend payout
► Increase dividend payout ratio to 90%
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