US fastfood giant McDonald's has said it generated a record US$3.9bn in cash from operations in 2004, up more than $600m over 2003, driven by higher sales and profits at existing restaurants.

Capital expenditures for 2004 were $1.4bn, including investments of $500m in new restaurants, $774m in existing restaurants and $145m in technology and other expenditures, resulting in record free cash flow of $2.5bn. During 2004, the company paid down $816m of debt.

"Over the past two years, McDonald's revitalisation efforts have been aligned with the Plan to Win and our commitment to growing by being better not just bigger. We have focused our resources on building comparable sales at existing restaurants by delivering a superior restaurant experience for our customers," said CEO Jim Skinner.

"This disciplined approach generated a $1bn increase in cash from operations since 2002, and free cash flow nearly tripled during the same period. I am energised by our progress and pleased with our strong operational and financial foundation. As we move forward, we will maintain fiscal discipline, focusing our investments where they will have the most impact on our restaurants and our customers. With ongoing dedication to operational excellence and leadership marketing, I am confident that 2005 will be another good year for McDonald's," he added.

McDonald's also announced a global music partnership with MTV to strengthen connections with the station's young adult audience. The collaboration launches with McDonald's exclusive support of MTV Advance Warning, a programme dedicated to introducing young adults to emerging artists.

"Partnering with MTV to create the first-ever global new music platform will enable McDonald's to play a more relevant and credible role in the lives of young adults," said Larry Light, McDonald's executive vice president and global chief marketing officer.