Union Pacific 2005 Annual Report Download - page 39

The following tables identify material obligations and commitments as of December 31, 2005:
Payments Due by Period
Contractual Obligations
Millions of Dollars Total 2006 2007 2008 2009 2010
After
2010
Debt [a] ............................. $10,082 $ 931 $1,034 $ 892 $ 694 $ 608 $ 5,923
Operating leases ....................... 4,934 615 517 450 405 359 2,588
Capital lease obligations [b] ............. 2,100 199 179 172 167 147 1,236
Purchase obligations [c] ................ 3,861 706 508 402 394 189 1,662
Other post retirement benefits [d] ........ 479 42 45 46 48 49 249
Total contractual obligations ............. $21,456 $2,493 $2,283 $1,962 $1,708 $1,352 $11,658
[a] Excludes capital lease obligations of $1,318 million, unamortized discount of $142 million, and market value adjustments of $(16) million for
debt with qualifying hedges that are recorded as assets on the Consolidated Statements of Financial Position. Includes an interest component of
$3,826 million.
[b] Represents total obligations, including interest component of $782 million.
[c] Purchase obligations include locomotive maintenance contracts; purchase commitments for locomotives, ties, ballast, and track; and agreements
to purchase other goods and services.
[d] Includes estimated other postretirement, medical, and life insurance payments and payments made under the unfunded pension plan for the
next ten years. No amounts are included for funded pension as no contributions are currently required.
Amount of Commitment Expiration
per Period
Other Commercial Commitments
Millions of Dollars Total 2006 2007 2008 2009 2010
After
2010
Credit facilities [a] ............................. $2,000 $ - $ - $- $1,000 $1,000 $ -
Sale of receivables [b] .......................... 600 600 - - - - -
Guarantees [c] ................................ 486 5 5 9 18 44 405
Standby letters of credit [d] ...................... 55 42 13 - - - -
Total commercial commitments .................. $3,141 $647 $18 $9 $1,018 $1,044 $405
[a] None of the credit facilities were used as of December 31, 2005.
[b] $600 million of the facility was utilized at December 31, 2005.
[c] Includes guaranteed obligations related to our headquarters building, equipment financings, and affiliated operations.
[d] None of the letters of credit were drawn upon as of December 31, 2005.
Sale of Receivables – The Railroad transfers most of its accounts receivable to Union Pacific Receivables, Inc.
(UPRI), a bankruptcy-remote subsidiary, as part of a sale of receivables facility. UPRI sells, without recourse on a
364-day revolving basis, an undivided interest in such accounts receivable to investors. The total capacity to sell
undivided interests to investors under the facility was $600 million at December 31, 2005. The value of the
outstanding undivided interest held by investors under the facility was $600 million and $590 million at
December 31, 2005 and 2004, respectively. The value of the outstanding undivided interest held by investors is not
included in our Consolidated Financial Statements. The value of the undivided interest held by investors was
supported by $1,226 million and $1,089 million of accounts receivable held by UPRI at December 31, 2005 and
2004, respectively. At December 31, 2005 and 2004, the value of the interest retained by UPRI was $626 million
and $499 million, respectively. This retained interest is included in accounts receivable in our Consolidated
Financial Statements. The interest sold to investors is sold at carrying value, which approximates fair value, and
there is no gain or loss recognized from the transaction.
The value of the outstanding undivided interest held by investors could fluctuate based upon the availability
of eligible receivables and is directly affected by changing business volumes and credit risks, including default and
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