Pershing Square Activist Presentation Deck
A. Pershing's Proposal: Assumptions
Pershing has assumed
the following structural
and tax assumptions
with respect to an IPO
spin-off of McOpCo.
McOpCo IPO: General Assumptions
65% of McOpCo shares are IPO'ed in the transaction
■ 35% stake retained by PF McDonald's allows for McOpCo's business to
be deconsolidated
McOpCo is assumed to be essentially a debt free subsidiary
Immediately prior to the IPO, $1.35bn of McDonald's consolidated FY '05E
net debt is allocated to McOpCo
■ $1.5 billion of total debt allocated
■ $150mm of cash and cash equivalents allocated
The remaining $5bn of FY '05E net debt is allocated to PF McDonald's
■ $5.15bn of total debt
■ $150mm of cash and cash equivalents
McOpCo's tax basis is assumed to be approximately $1.65 billion
■ 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 allocated net debt
To the extent that the IPO distribution exceeds PF McDonald's tax basis in
McOpCo, then the tax cost for the IPO would be the amount by which the IPO
distribution exceeds McDonald's basis multiplied by McDonald's corporate and
state/local tax rate
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