UPS 2008 Annual Report Download - page 87

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Other Debt:
The other debt balance primarily relates to loans entered into in conjunction with our investment in various
partnerships. Substantially all of this debt is classified as a current liability. The implied interest rates on this debt
range from 3.20% to 6.43%.
Other Information
Based on the borrowing rates currently available to the Company for long-term debt with similar terms and
maturities, the fair value of long-term debt, including current maturities, is approximately $10.287 and $11.238
billion as of December 31, 2008 and 2007, respectively.
We lease certain aircraft, facilities, equipment and vehicles under operating leases, which expire at various
dates through 2055. Certain of the leases contain escalation clauses and renewal or purchase options. Rent
expense related to our operating leases was $834, $896, and $912 million for 2008, 2007, and 2006, respectively.
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
2009 ................................................... $ 83 $ 344 $2,007 $ 708
2010 ................................................... 121 288 18 658
2011 ................................................... 29 217 5 667
2012 ................................................... 30 147 22 406
2013 ................................................... 31 109 1,768 —
After 2013 .............................................. 246 423 5,658 —
Total .................................................. 540 $1,528 $9,478 $2,439
Less: imputed interest ..................................... (115)
Present value of minimum capitalized lease payments ............ 425
Less: current portion ...................................... (65)
Long-term capitalized lease obligations ....................... $360
As of December 31, 2008, we had outstanding letters of credit totaling approximately $2.132 billion issued
in connection with our self-insurance reserves and other routine business requirements. We also issue surety
bonds as an alternative to letters of credit in certain instances, and as of December 31, 2008, we had $262 million
of surety bonds written.
We maintain two credit agreements with a consortium of banks. One of these agreements provides revolving
credit facilities of $4.5 billion, and expires on April 16, 2009. The second agreement provides revolving credit
facilities of $1.0 billion, and expires on April 19, 2012. Interest on any amounts we borrow under these facilities
would be charged at 90-day LIBOR plus 15 basis points. At December 31, 2008, there were no outstanding
borrowings under these facilities.
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 limit the
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