McDonalds 2009 Annual Report Download - page 45

The following table summarizes the Company’s debt obligations. (Interest rates and debt amounts reflected in the table include the
effects of interest rate exchange agreements.)
Interest rates(1)
December 31 Amounts outstanding December 31
In millions of U.S. Dollars Maturity dates 2009 2008 2009 2008
Fixed 5.6% 5.6% $ 4,677.6 $ 4,726.1
Floating 2.9 2.3 1,300.0 857.1
Total U.S. Dollars 2010-2039 5,977.6 5,583.2
Fixed 4.8 5.0 932.6 704.1
Floating 1.8 5.2 683.9 829.4
Total Euro 2010-2016 1,616.5 1,533.5
Fixed 6.0 6.0 726.2 654.9
Floating 3.6 2.0
Total British Pounds Sterling 2020-2032 726.2 656.9
Fixed 2.0 2.2 488.6 720.1
Floating 1.0 1.6 537.0 440.2
Total Japanese Yen 2010-2030 1,025.6 1,160.3
Fixed 2.7 2.8 359.6 453.8
Floating 3.8 5.6 793.3 722.5
Total other currencies(2) 2010-2021 1,152.9 1,176.3
Debt obligations before fair value adjustments(3) 10,498.8 10,110.2
Fair value adjustments(4) 79.6 107.6
Total debt obligations(5) $10,578.4 $10,217.8
(1) Weighted-average effective rate, computed on a semi-annual basis.
(2) Primarily consists of Swiss Francs, Chinese Renminbi, South Korean Won, and Singapore Dollars.
(3) Aggregate maturities for 2009 debt balances, before fair value adjustments, were as follows (in millions): 2010–$18.1; 2011–$613.2; 2012–$2,188.4; 2013–$657.7; 2014–
$459.4; Thereafter–$6,562.0. These amounts include a reclassification of short-term obligations totaling $1.2 billion to long-term obligations as they are supported by a long-term line
of credit agreement expiring in 2012.
(4) The Derivatives and Hedging Topic of the FASB ASC requires that the carrying value of underlying items in fair value hedges, in this case debt obligations, be adjusted for fair value
changes to the extent they are attributable to the risk designated as being hedged. The related hedging instrument is also recorded at fair value in prepaid expenses and other current
assets, miscellaneous other assets or other long-term liabilities on the Consolidated balance sheet. A portion ($14.4 million) of the adjustments at December 31, 2009 related to inter-
est rate exchange agreements that were terminated in December 2002 and will amortize as a reduction of interest expense over the remaining life of the debt.
(5) Includes notes payable, current maturities of long-term debt and long-term debt included on the Consolidated balance sheet. The increase in debt obligations from December 31, 2008
to December 31, 2009 was due to (in millions): net issuances ($219.3), changes in exchange rates on foreign currency denominated debt ($128.3) and other changes related primarily
to the consolidation of Norway ($41.0), partly offset by noncash fair value hedging adjustments ($28.0).
ESOP LOANS
Borrowings related to the leveraged Employee Stock Ownership
Plan (ESOP) at December 31, 2009, which include $55.7 million
of loans from the Company to the ESOP, are reflected as debt
with a corresponding reduction of shareholders’ equity (additional
paid-in capital included a balance of $48.4 million and
$56.4 million at December 31, 2009 and 2008, respectively).
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 borrow-
ings is repaid, the debt and the unearned ESOP compensation
(additional paid-in capital) are reduced.
Employee Benefit Plans
The Company’s Profit Sharing and Savings Plan for U.S.-based
employees includes a 401(k) feature, an ESOP feature, and a
discretionary employer profit sharing match. The 401(k) feature
allows participants to make pretax contributions that are partly
matched from shares released under the ESOP. The Profit Shar-
ing and Savings Plan also provides for a discretionary employer
profit sharing match after the end of the year for those
participants eligible to share in the match who have contributed
to the 401(k) feature.
All current account balances and future contributions and
related earnings can be invested in several investment alter-
natives as well as McDonald’s common stock in accordance with
each participant’s elections. Participants’ future contributions to
the 401(k) feature and the discretionary employer matching
contribution feature are limited to 20% investment in McDonald’s
common stock. Participants may choose to make separate
investment choices for current account balances and for future
contributions.
The Company also maintains certain supplemental benefit
plans that allow participants to (i) make tax-deferred con-
tributions and (ii) receive Company-provided allocations that
cannot be made under the Profit Sharing and Savings Plan
because of Internal Revenue Service limitations. The investment
alternatives and returns are based on certain market-rate invest-
ment alternatives under the Profit Sharing and Savings Plan.
Total liabilities were $397.3 million at December 31, 2009 and
$389.7 million at December 31, 2008 and were primarily
included in other long-term liabilities on the Consolidated balance
sheet.
McDonald’s Corporation Annual Report 2009 43