Impact of foreign currency translation on reported results While changing foreign currencies affect reported results, McDonald’s mitigates exposures, where practical, by financing in local currencies, hedging certain foreign-denominated cash flows, and purchasing goods and services in local currencies.
In 2008, foreign currency translation had a positive impact on consolidated operating results, driven by the stronger Euro and most other currencies, partly offset by the weaker British Pound.
However, in fourth quarter 2008, the U. S.  Dollar strengthened significantly against nearly every foreign currency, reducing the full year foreign currency benefit.
Due to this strengthening, full year 2009 revenues and operating income will likely be negatively impacted by foreign currency translation.
In 2007, foreign currency translation had a positive impact on consolidated operating results, primarily driven by the stronger Euro, British Pound, Australian Dollar and Canadian Dollar.
In 2006, consolidated operating results were positively impacted by the stronger Euro, Canadian Dollar and British Pound.
Impact of foreign currency translation on reported results
## Table 0 ##
Revenues The Company’s revenues consist of sales by Company-operated restaurants and fees from restaurants operated by franchisees.
Revenues from conventional franchised restaurants include rent and royalties based on a percent of sales along with minimum rent payments, and initial fees.
Revenues from restaurants licensed to affiliates and developmental licensees include a royalty based on a percent of sales, and may include initial fees.
In both 2008 and 2007, consolidated revenue growth was driven by positive comparable sales as well as stronger foreign currencies.
Revenue growth in both years was negatively impacted by the Latam transaction.
Upon completion of the Latam transaction in August 2007, the Company receives royalties based on a percent of sales in these markets instead of a combination of Companyoperated sales and franchised rents and royalties.
Revenue growth in 2008 was also partly offset by the impact of the refranchising strategy in certain of the Company’s major markets, which resulted in a higher proportion of franchised restaurants compared with 2007.
## Table 1 ##
adopted retrospectively.
We do not expect the adoption of SFAS No.160 to have a significant impact on our consolidated financial statements.
CASH FLOWS The Company generates significant cash from its operations and has substantial credit availability and capacity to fund operating and discretionary spending such as capital expenditures, debt repayments, dividends and share repurchases.
Cash provided by operations totaled $5.9 billion and exceeded capital expenditures by $3.8 billion in 2008, while cash provided by operations totaled $4.9 billion and exceeded capital expenditures by $2.9 billion in 2007.
In 2008, cash provided by operations increased $1.0 billion or 21% compared to 2007 primarily due to increased operating results and changes in working capital, partly due to lower income tax payments and the receipt of $143 million related to an IRS examination completed in 2007.
In 2007, cash provided by operations increased $535 million compared to 2006 primarily due to increased operating results and lower income tax payments.
Cash used for investing activities totaled $1.6 billion in 2008, an increase of $475 million compared with 2007.
Proceeds from certain asset sales were lower in 2008 (Pret A Manger) than 2007 (Latam and Boston Market).
In addition, capital expenditures increased $189 million in 2008, primarily driven by increases in Europe and APMEA, partly offset by the elimination of capital expenditures as a result of the Latam transaction.
The increase in cash used for investing activities was partly offset by higher proceeds from the sales of restaurant businesses and property and lower expenditures on purchases of restaurant businesses in conjunction with our overall refranchising strategy.
Cash used for investing activities totaled $1.2 billion in 2007, a decrease of $124 million compared with 2006, primarily due to net proceeds received from the Latam transaction and the sale of Boston Market in 2007, partly offset by higher capital expenditures.
Cash used for financing activities totaled $4.1 billion in 2008, an increase of $118 million compared with 2007.  Financing activities in 2008 reflected lower proceeds from stock option exercises, mostly offset by higher net debt issuances.
In 2007, cash used for financing activities totaled $4.0 billion, a decrease of $1.5 billion compared to 2006, primarily due to higher net debt issuances, partly offset by higher treasury stock purchases and an increase in the common stock dividend.
As a result of the above activity, the Company’s cash and equivalents balance increased $82 million in 2008 to $2.1 billion, compared with a decrease of $147 million in 2007.
In addition to cash and equivalents on hand and cash provided by operations, the Company can meet short-term funding needs through its continued access to commercial paper borrowings and line of credit agreements.
Restaurant development and capital expenditures In 2008, the Company opened 918 traditional restaurants and 77 satellite restaurants (small, limited-menu restaurants for which the land and building are generally leased), and closed 209 traditional restaurants and 196 satellite restaurants.
In 2007, the Company opened 743 traditional restaurants and 93 satellite restaurants, and closed 240 traditional restaurants and 265 satellite restaurants.
About 60% of restaurant openings and more than 75% of restaurant closings occurred in the major markets in both years.
Systemwide restaurants at year end(1)
## Table 2 ##
(1) Includes satellite units at December 31, 2008, 2007 and 2006 as follows: U. S. – 1,169, 1,233, 1,254; Europe–226, 214, 201; APMEA (primarily Japan)–1,379, 1,454, 1,640; Other Countries & Corporate–447, 439, 417.
In 2009, the Company expects to open about 950 traditional restaurants and 50 satellite restaurants and close about 200 traditional restaurants and 150 satellite restaurants.
About 60% of total openings and 70% of total closings will be in major markets.
Approximately 65% of Company-operated restaurants and about 80% of franchised restaurants were located in the major markets at the end of 2008.
Franchisees operated 80% of the restaurants at year-end 2008.
Capital expenditures increased $189 million or 10% in 2008 and $205 million or 12% in 2007.
The increases in capital expenditures in both years were primarily due to higher investment in new restaurants — in Europe and APMEA in 2008 and in Europe and the U. S.  in 2007.
Capital expenditures reflected the Company’s commitment to growing sales at existing restaurants, including reinvestment initiatives such as reimaging in many markets around the world in both years and the Combined Beverage Business in the U. S.  in 2008.
Capital expenditures related to discontinued operations were $10 million and $82 million in 2007 and 2006, respectively.
The expenditures in 2007 primarily related to investment in existing Boston Market restaurants and expenditures in 2006 primarily related to new Chipotle restaurants.
Capital expenditures invested in major markets, excluding Japan, represented over 70% of the total in 2008, 2007 and 2006.
Japan is accounted for under the equity method, and accordingly its capital expenditures are not included in consolidated amounts.
Capital expenditures
## Table 3 ##
(1) Primarily corporate equipment and other office related expenditures.
New restaurant investments in all years were concentrated in markets with acceptable returns or opportunities for long-term growth.
Average development costs vary widely by market depending on the types of restaurants built and the real estate and construction costs within each market.
These costs, which include land, buildings and equipment, are managed through the use of optimally sized restaurants, construction and design efficiencies and leveraging best practices.
In addition, foreign currency fluctuations affect average development costs.
Although the Company is not responsible for all costs for every restaurant opened, total development costs (consisting of land, buildings and equipment) for new traditional McDonald’s restaurants in the U. S.  averaged approximately $2.6 million in 2008
Contractual obligations and commitments The Company has long-term contractual obligations primarily in the form of lease obligations (related to both Company-operated and franchised restaurants) and debt obligations.
In addition, the Company has long-term revenue and cash flow streams that relate to its franchise arrangements.
Cash provided by operations (including cash provided by these franchise arrangements) along with the Company’s borrowing capacity and other sources of cash will be used to satisfy the obligations.
The following table summarizes the Company’s contractual obligations and their aggregate maturities as well as future minimum rent payments due to the Company under existing franchise arrangements as of December 31, 2008.
See discussions of cash flows and financial position and capital resources as well as the Notes to the consolidated financial statements for further details.
## Table 4 ##
(1) The maturities reflect reclassifications of short-term obligations to long-term obligations of $1.3 billion, as they are supported by a long-term line of credit agreement expiring in 2012.
Debt obligations do not include $108 million of SFAS No.133 noncash fair value adjustments because these adjustments have no impact on the obligation at maturity, as well as $174 million of accrued interest.
The Company maintains certain supplemental benefit plans that allow participants to (i) make tax-deferred contributions and (ii) receive Company-provided allocations that cannot be made under the qualified benefit plans because of IRS limitations.
The investment alternatives and returns are based on certain marketrate investment alternatives under the Company’s qualified Profit Sharing and Savings Plan.
Total liabilities for the supplemental plans were $390 million at December 31, 2008 and were primarily included in other long-term liabilities on the Consolidated balance sheet.
Also included in other long-term liabilities at December 31, 2008 were gross unrecognized tax benefits of $272 million and liabilities for international retirement plans of $131 million.
In connection with the Latam transaction, the Company has agreed to indemnify the buyers for certain tax and other claims, certain of which are reflected in other long-term liabilities on McDonald’s Consolidated balance sheet totaling $142 million at year-end 2008.
OTHER MATTERS Critical accounting policies and estimates Management’s discussion and analysis of financial condition and results of operations is based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U. S.  The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses as well as related disclosures.
On an ongoing basis, the Company evaluates its estimates and judgments based on historical experience and various other factors that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates under various assumptions or conditions.
The Company reviews its financial reporting and disclosure practices and accounting policies quarterly to ensure that they provide accurate and transparent information relative to the current economic and business environment.
The Company believes that of its significant accounting policies, the following involve a higher degree of judgment and/or complexity: ?
Property and equipment Property and equipment are depreciated or amortized on a straight-line basis over their useful lives based on management’s estimates of the period over which the assets will generate revenue (not to exceed lease term plus options for leased property).
The useful lives are estimated based on historical experience with similar assets, taking into account anticipated technological or other changes.
The Company periodically reviews these lives relative to physical factors, economic factors and industry trends.
If there are changes in the planned use of property and equipment, or if technological changes occur more rapidly than anticipated, the useful lives assigned to these assets may need to be shortened, resulting in the recognition of increased depreciation and amortization expense or write-offs in future periods.  ?
Share-based compensation The Company has a share-based compensation plan which authorizes the granting of various equity-based incentives including stock options and restricted stock units (RSUs) to employees and nonemployee directors.
The expense for these equity-based incentives is based on their fair value at date of grant and generally amortized over their vesting period.
The fair value of each stock option granted is estimated on the date of grant using a closed-form pricing model.
The pricing model requires assumptions, such as the expected life of the stock option, the risk-free interest rate and expected volatility of the Company’s stock over the expected life, which significantly impact the assumed fair value.
The Company uses historical data to determine these assumptions and if these assumptions change significantly for future grants, share-based compensation expense will fluctuate in future years.
The fair value of each RSU granted is equal to the market price of the Company’s stock at date of grant less the present value of expected dividends over the vesting period.  ?
Long-lived assets impairment review Long-lived assets (including goodwill) are reviewed for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
In assessing the recoverability of the Company’s long-lived assets, the Company considers changes in economic conditions and makes assumptions regarding estimated future cash flows and other factors.
Estimates of future cash flows are highly subjective judgments based on the Company’s experience and knowledge of its operations.
These estimates can be significantly impacted by many factors including changes in global and local business and economic conditions, operating costs, inflation, competition, and consumer and demographic trends.
A key assumption impacting estimated future cash flows is the estimated change in comparable sales.
If the Company’s estimates or underlying assumptions change in the future, the Company may be required to record impairment charges.
When the Company sells an existing business to a developmental licensee, it determines when these businesses are “held for sale” in accordance with the requirements of SFAS No.144, Accounting for the Impairment or Disposal of Long-lived Assets.
Impairment charges on assets held for sale are recognized when
Off-Balance Sheet TransactionsNone.
Contractual ObligationsAs of December 31, 2017, our contractual obligations with initial or remaining terms in excess of one year, including interest payments on long-term debt obligations, were as follows (in thousands):
## Table 5 ##
(1)Includes discount and premiums aggregating $0.5 million.
Also includes capital leases.
The amount excludes deferred financing fees which are included in the consolidated balance sheets as an offset to long-term debt.
(2)Primarily for offices, motor vehicles and office equipment.
(3)For our newbuild ships based on the euro/U.
S.  dollar exchange rate as of December 31, 2017.
Export credit financing is in place from syndicates of banks.
(4)Primarily for our usage of certain port facilities.
(5)Includes fixed and variable rates with LIBOR held constant as of December 31, 2017.
(6)Future commitments for service, maintenance and other Business Enhancement Capital Expenditure contracts.
The table above does not include $0.5 million of unrecognized tax benefits (we refer you to the Notes to the Consolidated Financial Statements Note—10 “Income Tax”).
OtherCertain service providers may require collateral in the normal course of our business.
The amount of collateral may change based on certain terms and conditions.
As a routine part of our business, depending on market conditions, exchange rates, pricing and our strategy for growth, we regularly consider opportunities to enter into contracts for the building of additional ships.
We may also consider the sale of ships, potential acquisitions and strategic alliances.
If any of these transactions were to occur, they may be financed through the incurrence of additional permitted indebtedness, through cash flows from operations, or through the issuance of debt, equity or equity-related securities.
Funding SourcesCertain of our debt agreements contain covenants that, among other things, require us to maintain a minimum level of liquidity, as well as limit our net funded debt-to-capital ratio, maintain certain other ratios and restrict our ability to pay dividends.
Substantially all of our ships and other property and equipment are pledged as collateral for certain of our debt.
We believe we were in compliance with these covenants as of December 31, 2017.
The impact of changes in world economies and especially the global credit markets can create a challenging environment and may reduce future consumer demand for cruises and adversely affect our counterparty credit risks.
In the event this environment deteriorates, our business, financial condition and results of operations could be adversely impacted.
We believe our cash on hand, expected future operating cash inflows, additional available borrowings under our New Revolving Loan Facility and our ability to issue debt securities or additional equity securities, will be sufficient to fund operations, debt payment requirements, capital expenditures and maintain compliance with covenants under our debt agreements over the next twelve-month period.
There is no assurance that cash flows from operations and additional financings will be available in the future to fund our future obligations.

<table><tr><td></td><td colspan="3"><i>Reported amount</i></td><td colspan="3">Currency translation benefit/(cost)</td></tr><tr><td><i>In millions, except per share data</i></td><td> <i>2008</i></td><td><i>2007</i></td><td><i>2006</i></td><td>2008</td><td>2007</td><td>2006</td></tr><tr><td>Revenues</td><td>$23,522</td><td>$22,787</td><td>$20,895</td><td>$441</td><td>$988</td><td>$271</td></tr><tr><td>Company-operated margins</td><td>2,908</td><td>2,869</td><td>2,497</td><td>63</td><td>129</td><td>35</td></tr><tr><td>Franchised margins</td><td>5,731</td><td>5,036</td><td>4,435</td><td>120</td><td>179</td><td>23</td></tr><tr><td>Selling, general & administrative expenses</td><td>2,355</td><td>2,367</td><td>2,296</td><td>-21</td><td>-73</td><td>-19</td></tr><tr><td>Operating income</td><td>6,443</td><td>3,879</td><td>4,433</td><td>163</td><td>230</td><td>29</td></tr><tr><td>Income from continuing operations</td><td>4,313</td><td>2,335</td><td>2,866</td><td>103</td><td>138</td><td>18</td></tr><tr><td>Net income</td><td>4,313</td><td>2,395</td><td>3,544</td><td>103</td><td>138</td><td>18</td></tr><tr><td>Income from continuing operations per common share—diluted</td><td>3.76</td><td>1.93</td><td>2.29</td><td>.09</td><td>.12</td><td>.02</td></tr><tr><td>Net income per common share—diluted</td><td>3.76</td><td>1.98</td><td>2.83</td><td>.09</td><td>.12</td><td>.01</td></tr></table>
<table><tr><td></td><td colspan="3"><i>Amount</i></td><td colspan="2">Increase/(decrease)</td><td colspan="2">Increase/(decrease) excluding currency translation</td></tr><tr><td><i>Dollars in millions</i></td><td> <i>2008</i></td><td><i>2007</i></td><td><i>2006</i></td><td>2008</td><td>2007</td><td>2008</td><td>2007</td></tr><tr><td>Company-operated sales:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S.</td><td>$4,636</td><td>$4,682</td><td>$4,410</td><td>-1%</td><td>6%</td><td>-1%</td><td>6%</td></tr><tr><td>Europe</td><td>7,424</td><td>6,817</td><td>5,885</td><td>9</td><td>16</td><td>6</td><td>7</td></tr><tr><td>APMEA</td><td>3,660</td><td>3,134</td><td>2,674</td><td>17</td><td>17</td><td>14</td><td>12</td></tr><tr><td>Other Countries & Corporate</td><td>841</td><td>1,978</td><td>2,433</td><td>-57</td><td>-19</td><td>-58</td><td>-23</td></tr><tr><td>Total</td><td>$16,561</td><td>$16,611</td><td>$15,402</td><td>–%</td><td>8%</td><td>-2%</td><td>3%</td></tr><tr><td>Franchised revenues:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S.</td><td>$3,442</td><td>$3,224</td><td>$3,054</td><td>7%</td><td>6%</td><td>7%</td><td>6%</td></tr><tr><td>Europe</td><td>2,499</td><td>2,109</td><td>1,753</td><td>18</td><td>20</td><td>13</td><td>10</td></tr><tr><td>APMEA</td><td>571</td><td>465</td><td>379</td><td>23</td><td>22</td><td>20</td><td>14</td></tr><tr><td>Other Countries & Corporate</td><td>449</td><td>378</td><td>307</td><td>19</td><td>24</td><td>17</td><td>17</td></tr><tr><td>Total</td><td>$6,961</td><td>$6,176</td><td>$5,493</td><td>13%</td><td>12%</td><td>10%</td><td>8%</td></tr><tr><td>Total revenues:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S.</td><td>$8,078</td><td>$7,906</td><td>$7,464</td><td>2%</td><td>6%</td><td>2%</td><td>6%</td></tr><tr><td>Europe</td><td>9,923</td><td>8,926</td><td>7,638</td><td>11</td><td>17</td><td>7</td><td>8</td></tr><tr><td>APMEA</td><td>4,231</td><td>3,599</td><td>3,053</td><td>18</td><td>18</td><td>15</td><td>12</td></tr><tr><td>Other Countries & Corporate</td><td>1,290</td><td>2,356</td><td>2,740</td><td>-45</td><td>-14</td><td>-46</td><td>-18</td></tr><tr><td>Total</td><td>$23,522</td><td>$22,787</td><td>$20,895</td><td>3%</td><td>9%</td><td>1%</td><td>4%</td></tr></table>
<table><tr><td></td><td> <i>2008</i></td><td><i>2007</i></td><td><i>2006</i></td></tr><tr><td>U.S.</td><td> 13,918</td><td>13,862</td><td>13,774</td></tr><tr><td>Europe</td><td> 6,628</td><td>6,480</td><td>6,403</td></tr><tr><td>APMEA</td><td> 8,255</td><td>7,938</td><td>7,822</td></tr><tr><td>Other Countries & Corporate</td><td> 3,166</td><td>3,097</td><td>3,047</td></tr><tr><td>Total</td><td> 31,967</td><td>31,377</td><td>31,046</td></tr></table>
<table><tr><td><i>In millions</i></td><td> <i>2008</i></td><td><i>2007</i></td><td><i>2006</i></td></tr><tr><td>New restaurants</td><td>$897</td><td>$687</td><td>$530</td></tr><tr><td>Existing restaurants</td><td>1,152</td><td>1,158</td><td>1,075</td></tr><tr><td>Other<i><sup>-1</sup></i></td><td>87</td><td>102</td><td>137</td></tr><tr><td>Total capital expenditures</td><td>$2,136</td><td>$1,947</td><td>$1,742</td></tr><tr><td>Total assets</td><td>$28,462</td><td>$29,392</td><td>$28,974</td></tr></table>
<table><tr><td></td><td colspan="2"><i>Contractual cash outflows</i></td><td rowspan="2"><i>Contractual cash inflows</i> <i>Minimum rent underfranchise arrangements</i></td></tr><tr><td><i>In millions</i></td><td><i>Operatingleases</i></td><td><i>Debtobligations<sup>-1</sup></i></td></tr><tr><td>2009</td><td>$1,046</td><td>$32</td><td>$2,090</td></tr><tr><td>2010</td><td>972</td><td>616</td><td>2,028</td></tr><tr><td>2011</td><td>891</td><td>611</td><td>1,952</td></tr><tr><td>2012</td><td>809</td><td>2,214</td><td>1,886</td></tr><tr><td>2013</td><td>746</td><td>657</td><td>1,809</td></tr><tr><td>Thereafter</td><td>5,614</td><td>5,980</td><td>13,641</td></tr><tr><td>Total</td><td>$10,078</td><td>$10,110</td><td>$23,406</td></tr></table>
<table><tr><td></td><td>Total</td><td>Less than1 year</td><td>1-3 years</td><td>3-5 years</td><td>More than5 years</td></tr><tr><td>Long-term debt<sup>-1</sup></td><td>$6,424,582</td><td>$619,373</td><td>$1,248,463</td><td>$3,002,931</td><td>$1,553,815</td></tr><tr><td>Operating leases<sup>-2</sup></td><td>131,791</td><td>15,204</td><td>28,973</td><td>26,504</td><td>61,110</td></tr><tr><td>Ship construction contracts<sup>-3</sup></td><td>6,138,219</td><td>1,016,892</td><td>1,363,215</td><td>1,141,212</td><td>2,616,900</td></tr><tr><td>Port facilities<sup>-4</sup></td><td>138,308</td><td>30,509</td><td>43,388</td><td>23,316</td><td>41,095</td></tr><tr><td>Interest<sup>-5</sup></td><td>947,967</td><td>218,150</td><td>376,566</td><td>203,099</td><td>150,152</td></tr><tr><td>Other<sup>-6</sup></td><td>168,678</td><td>54,800</td><td>73,653</td><td>23,870</td><td>16,355</td></tr><tr><td>Total</td><td>$13,949,545</td><td>$1,954,928</td><td>$3,134,258</td><td>$4,420,932</td><td>$4,439,427</td></tr></table>

Question: what percentage of payments was long-term debt?
Answer: 0.46056