McDonalds 2011 Annual Report Download - page 40

Segment and Geographic Information
The Company operates in the global restaurant industry and
manages its business as distinct geographic segments. All inter-
company revenues and expenses are eliminated in computing
revenues and operating income. Corporate general & admin-
istrative expenses are included in Other Countries & Corporate
and consist of home office support costs in areas such as facili-
ties, finance, human resources, information technology, legal,
marketing, restaurant operations, supply chain and training.
Corporate assets include corporate cash and equivalents, asset
portions of financial instruments and home office facilities.
In millions 2011 2010 2009
U.S. $ 8,528.2 $ 8,111.6 $ 7,943.8
Europe 10,886.4 9,569.2 9,273.8
APMEA 6,019.5 5,065.5 4,337.0
Other Countries &
Corporate 1,571.9 1,328.3 1,190.1
Total revenues $27,006.0 $24,074.6 $22,744.7
U.S. $ 3,666.2 $ 3,446.5 $ 3,231.7
Europe 3,226.7 2,796.8 2,588.1
APMEA 1,525.8 1,199.9(1) 989.5
Other Countries &
Corporate 111.0 29.9(2) 31.7(3)
Total operating income $ 8,529.7 $ 7,473.1 $ 6,841.0
U.S. $10,865.5 $10,467.7 $10,429.3
Europe 12,015.1 11,360.7 11,494.4
APMEA 5,824.2 5,374.0 4,409.0
Other Countries &
Corporate 4,285.1 4,772.8 3,892.2
Total assets $32,989.9 $31,975.2 $30,224.9
U.S. $ 786.5 $ 530.5 $ 659.4
Europe 1,130.1 978.5 859.3
APMEA 614.1 493.1 354.6
Other Countries &
Corporate 199.1 133.4 78.8
Total capital expenditures $ 2,729.8 $ 2,135.5 $ 1,952.1
U.S. $ 446.0 $ 433.0 $ 423.8
Europe 570.3 500.5 483.2
APMEA 267.5 232.4 202.9
Other Countries &
Corporate 131.2 110.3 106.3
Total depreciation and
amortization $ 1,415.0 $ 1,276.2 $ 1,216.2
(1) Includes expense due to Impairment and other charges (credits), net of $39.3 million
related to the Company’s share of restaurant closings in McDonald’s Japan (a
50%-owned affiliate).
(2) Includes income due to Impairment and other charges (credits), net of $21.0 million
related to the resolution of certain liabilities retained in connection with the 2007
Latin America developmental license transaction.
(3) Includes income due to Impairment and other charges (credits), net of $65.2 million
primarily related to the resolution of certain liabilities retained in connection with the
2007 Latin America developmental license transaction.
Total long-lived assets, primarily property and equipment,
were (in millions)–Consolidated: 2011–$27,587.6; 2010–
$26,700.9; 2009–$25,896.1; U.S. based: 2011–$10,724.9;
2010–$10,430.2; 2009–$10,376.4.
Debt Financing
LINE OF CREDIT AGREEMENTS
At December 31, 2011, the Company had a $1.5 billion line of
credit agreement expiring in November 2016 with fees of
0.065% per annum on the total commitment, which remained
unused. Fees and interest rates on this line are based on the
Company’s long-term credit rating assigned by Moody’s and
Standard & Poor’s. In addition, the Company, including certain
subsidiaries outside the U.S., had unused lines of credit totaling
$838.9 million at December 31, 2011; these lines of credit were
primarily uncommitted, short-term and denominated in various
currencies at local market rates of interest.
The weighted-average interest rate of short-term borrowings
was 4.6% at December 31, 2011 (based on $640.3 million of
foreign currency bank line borrowings and $250.0 million of
commercial paper) and 4.3% at December 31, 2010 (based on
$595.0 million of foreign currency bank line borrowings).
DEBT OBLIGATIONS
The Company has incurred debt obligations principally through pub-
lic and private offerings and bank loans. There are no provisions in
the Company’s debt obligations that would accelerate repayment of
debt as a result of a change in credit ratings or a material adverse
change in the Company’s business. Certain of the Company’s debt
obligations contain cross-acceleration provisions, and restrictions on
Company and subsidiary mortgages and the long-term debt of cer-
tain 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 Company has no current plans to retire a significant
amount of its debt prior to maturity.
In February 2012, the Company issued $250.0 million of 10-
year U.S. Dollar-denominated notes at a coupon rate of 2.625%,
and $500.0 million of 30-year U.S. Dollar-denominated notes at
a coupon rate of 3.7%.
ESOP LOANS
Borrowings related to the leveraged Employee Stock Ownership
Plan (ESOP) at December 31, 2011, which include $39.6 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 $34.4 million and
$41.7 million at December 31, 2011 and 2010, 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.
38 McDonald’s Corporation Annual Report 2011