McDonalds 2000 Annual Report Download - page 46

ESOP loans and other guarantees
The Company has guaranteed and included in total debt at December 31, 2000, $26.8 million of Notes issued by the Leveraged Employee
Stock Ownership Plan (ESOP) with payments through 2006. Borrowings related to the ESOP at December 31, 2000, which include $97.1 mil-
lion of loans from the Company to the ESOP and the $26.8 million of notes guaranteed by the Company, are reflected as long-term debt with
a corresponding reduction of shareholders’ equity (unearned ESOP compensation). The ESOP is repaying the loans and interest through 2018
using Company contributions and dividends from its McDonald’s common stock holdings. As the principal amount of the borrowings is
repaid, the debt and the unearned ESOP compensation are being reduced.
The Company also has guaranteed certain affiliate loans totaling $150.1 million at December 31, 2000.
Debt obligations
The Company has incurred debt obligations through public and private offerings and bank loans. The terms of most debt obligations contain
restrictions on Company and subsidiary mortgages and long-term debt of certain subsidiaries. Under certain agreements, the Company
has the option to retire debt prior to maturity, either at par or at a premium over par. The following table summarizes these debt obligations,
including the effects of foreign currency and interest-rate exchange agreements.
Interest rates(1) Amounts outstanding
Maturity December 31 December 31 Aggregate maturities for 2000 balances
IN MILLIONS OF U.S. DOLLARS dates 2000 1999 2000 1999 2001 2002 2003 2004 2005 Thereafter
Fixed—original issue(2) 6.8% 6.9% $2,793.5 $ 3,008.1
Fixed—converted via
exchange agreements(3) 6.1 6.2 (351.5) (1,773.1)
Floating 6.6 6.7 914.1 470.7
Total U.S. Dollars 2001–2037 3,356.1 1,705.7 $ 635.1 $ 87.6 $ 43.9 $100.4 $ 292.1 $2,197.0
Fixed 5.7 5.6 654.4 1,941.2
Floating 4.8 3.6 1,609.6 609.4
Total Euro 2001–2012 2,264.0 2,550.6 417.4 42.9 135.3 334.7 282.5 1,051.2
Fixed 6.2 7.6 524.6 596.5
Floating 7.2 6.0 233.3 145.9
Total British Pounds Sterling 2001–2020 757.9 742.4 39.0 45.1 148.7 223.4 301.7
Fixed 5.5 5.4 337.3 228.4
Floating 6.7 4.8 25.7 15.6
Total other European currencies(4) 2001–2005 363.0 244.0 69.4 35.2 38.6 12.7 207.1
Fixed 2.7 3.5 589.0 488.1
Floating 0.5 0.1 262.4 298.5
Total Japanese Yen 2001–2030 851.4 786.6 43.7 130.1 677.6
Fixed 8.6 8.1 316.0 415.0
Floating 7.6 6.4 453.5 503.0
Total other Asia/Pacific currencies(5) 2001–2011 769.5 918.0 626.4 13.9 90.5 32.3 6.4
Fixed 16.0 6.9 42.2 13.2
Floating 7.3 5.2 30.2 86.3
Total other currencies 2001–2021 72.4 99.5 43.7 12.9 8.6 4.8 0.5 1.9
Debt obligations including the net
effects of foreign currency and
interest-rate exchange agreements 8,434.3 7,046.8 1,874.7 237.6 465.6 484.9 1,135.7 4,235.8
Short-term obligations supported by
long-term line of credit agreements (1,250.0) 750.0 500.0
Net asset positions of foreign currency
exchange agreements (included in
miscellaneous other assets) 39.6 205.5 5.3 5.9 5.9 22.1 0.4
Total debt obligations $8,473.9 $ 7,252.3 $ 630.0 $243.5 $1,221.5 $507.0 $1,136.1 $4,735.8
(1) Weighted-average effective rate, computed on a semiannual basis.
(2) Includes $500 million of debentures with maturities in 2027, 2036 and 2037, which are subordinated to senior
debt and which provide for the ability to defer interest payments up to five years under certain conditions.
(3) A portion of U.S. Dollar fixed-rate debt effectively has been converted into other currencies and/or into floating-rate
debt through the use of exchange agreements. The rates shown reflect the fixed rate on the receivable portion of the
exchange agreements. All other obligations in this table reflect the net effects of these and other exchange agreements.
(4) Primarily consists of Swiss Francs.
(5) Primarily consists of Australian Dollars and New Taiwan Dollars.
44 Financial review