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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table sets forth the aggregate minimum lease payments under capital and operating leases, the
aggregate annual principal payments due under our long-term debt, and the aggregate amounts expected to be
spent for purchase commitments (in millions).
Year
Capital
Leases
Operating
Leases
Debt
Principal
Purchase
Commitments
2007 ................................................... $ 75 $ 404 $ 918 $1,072
2008 ................................................... 75 335 27 988
2009 ................................................... 41 243 83 499
2010 ................................................... 62 168 30 1,022
2011 ................................................... 1 119 33 1,184
After 2011 .............................................. — 505 2,766 1,636
Total .................................................. 254 $1,774 $3,857 $6,401
Less: imputed interest ..................................... (24)
Present value of minimum capitalized lease payments ............ 230
Less: current portion ...................................... (65)
Long-term capitalized lease obligations ....................... $165
As described in Note 18, we placed orders for 27 Boeing 767-300ER freighter aircraft in February 2007,
which are scheduled to be delivered between 2009 and 2012. Additionally, also described in Note 18, we reached
an agreement with Airbus in February 2007 to set out a timetable for deciding the status of our previous order for
the freighter version of the Airbus A380-800. We have included the purchase commitments associated with both
the new Boeing 767-300ER order and the existing Airbus A380-800 order in the purchase commitments
information presented in the table above.
As of December 31, 2006, we had outstanding letters of credit totaling approximately $2.213 billion issued
in connection with routine business requirements.
We maintain two credit agreements with a consortium of banks that provide revolving credit facilities of
$1.0 billion each, with one expiring April 19, 2007 and the other April 21, 2010. Interest on any amounts we
borrow under these facilities would be charged at 90-day LIBOR plus 15 basis points. At December 31, 2006,
there were no outstanding borrowings under these facilities.
We have a $2.0 billion shelf registration statement under which we may issue debt securities in the U.S. The
debt may be denominated in a variety of currencies. There was approximately $136 million issued under this
shelf registration statement at December 31, 2006.
Our existing debt instruments and credit facilities do not have cross-default or ratings triggers, however
these debt instruments and credit facilities do subject us to certain financial covenants. These covenants generally
require us to maintain a $3.0 billion minimum net worth and limit the amount of secured indebtedness available
to the company. These covenants are not considered material to the overall financial condition of the company,
and all covenant tests were passed as of December 31, 2006.
NOTE 9. LEGAL PROCEEDINGS AND CONTINGENCIES
We are a defendant in a number of lawsuits filed in state and federal courts containing various class-action
allegations under state wage-and-hour laws. In one of these cases, Marlo v. UPS, which has been certified as a
class action in a California federal court, plaintiffs allege that they improperly were denied overtime, and seek
penalties for missed meal and rest periods, and interest and attorneys’ fees. Plaintiffs purport to represent a class
F-29