UPS 2011 Annual Report Download - page 106

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
NOTE 8. DEBT AND FINANCING ARRANGEMENTS
The carrying value of our debt obligations, as of December 31, consists of the following (in millions):
Maturity 2011 2010
Commercial paper ............................................... 2012 $ — $ 341
4.50% senior notes .............................................. 2013 1,778 1,815
3.875% senior notes ............................................. 2014 1,050 1,061
5.50% senior notes .............................................. 2018 841 795
5.125% senior notes ............................................. 2019 1,119 1,032
8.375% debentures .............................................. 2020 504 453
3.125% senior notes ............................................. 2021 1,641 1,464
8.375% debentures .............................................. 2030 284 284
6.20% senior notes .............................................. 2038 1,480 1,480
4.875% senior notes ............................................. 2040 489 488
Floating rate senior notes ......................................... 2049 – 2053 376 386
Capital lease obligations .......................................... 2012 – 3004 469 160
Facility notes and bonds .......................................... 2015 – 2036 320 320
Pound Sterling notes ............................................. 2031 / 2050 777 764
Other debt ..................................................... 2012 — 3
Total debt ...................................................... 11,128 10,846
Less current maturities ........................................... (33) (355)
Long-term debt ................................................. $11,095 $10,491
Commercial Paper
As of December 31, 2011, we had no commercial paper outstanding. The amount of commercial paper
outstanding in 2012 is expected to fluctuate. We are authorized to borrow up to $10.0 billion under the U.S.
commercial paper program we maintain as of December 31, 2011. We also maintain a European commercial
paper program under which we are authorized to borrow up to €1.0 billion in a variety of currencies, however no
amounts were outstanding under this program as of December 31, 2011.
Fixed Rate Senior Notes
In January 2008, we completed an offering of $1.750 billion of 4.50% senior notes due January 2013, $750
million of 5.50% senior notes due January 2018, and $1.500 billion of 6.20% senior notes due January 2038. All
of the notes pay interest semiannually, and allow for redemption of the notes by UPS at any time by paying the
greater of the principal amount or a “make-whole” amount, plus accrued interest. After pricing and underwriting
discounts, we received a total of $3.961 billion in cash proceeds from the offering. The proceeds from the
offering were used to reduce our outstanding commercial paper balance. We subsequently entered into interest
rate swaps on the 2013 and 2018 notes, which effectively converted the fixed interest rates on the notes to
variable LIBOR-based interest rates. The average interest rate payable on the notes, including the impact of the
interest rate swaps, for 2011 and 2010, respectively, was 2.39% and 2.42% for the 2013 notes, and 2.53% and
2.22% for the 2018 notes.
In March 2009, we completed an offering of $1.0 billion of 3.875% senior notes due April 2014 and $1.0
billion of 5.125% senior notes due April 2019. These notes pay interest semiannually, and we may redeem the
notes at any time by paying the greater of the principal amount or a “make-whole” amount, plus accrued interest.
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