Union Pacific 2005 Annual Report Download - page 63

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retained earnings available for dividends was $6.2 billion and $5.2 billion at December 31, 2005 and 2004,
respectively. We do not expect that these restrictions will have a material adverse effect on our consolidated
financial condition, results of operations, or liquidity. We declared dividends of $316 million in 2005 and $312
million in 2004.
Shelf Registration Statement – Under a current shelf registration statement, we may issue any combination of
debt securities, preferred stock, common stock, or warrants for debt securities or preferred stock in one or more
offerings. At December 31, 2005, we had $500 million remaining for issuance under the current shelf registration
statement. We have no immediate plans to issue any securities; however, we routinely consider and evaluate
opportunities to replace existing debt or access capital through issuances of debt securities under this shelf
registration, and, therefore, we may issue debt securities at any time.
5. Leases
We lease certain locomotives, freight cars, and other property. Future minimum lease payments for operating and
capital leases with initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2005
were as follows:
Millions of Dollars
Operating
Leases
Capital
Leases
2006 ..................................................... $ 615 $ 199
2007 ..................................................... 517 179
2008 ..................................................... 450 172
2009 ..................................................... 405 167
2010 ..................................................... 359 147
Later Years ............................................... 2,588 1,236
Total minimum lease payments ............................... $4,934 $2,100
Amount representing interest ................................ N/A (782)
Present value of minimum lease payments ...................... N/A $1,318
Rent expense for operating leases with terms exceeding one month was $728 million in 2005, $651 million in
2004, and $586 million in 2003. When rental payments are not made on a straight-line basis, we recognize rental
expense on a straight-line basis over the lease term. Contingent rentals and sub-rentals are not significant.
6. Retirement Plans
Pension and Other Postretirement Benefits
Pension Plans – We provide defined benefit retirement income to eligible non-union employees through qualified
and non-qualified (supplemental) pension plans. Qualified and non-qualified pension benefits are based on years
of service and the highest compensation during the latest years of employment, with specific reductions made for
early retirements.
Other Postretirement Benefits (OPEB) – We provide defined contribution medical and life insurance benefits for
eligible retirees. These benefits are funded as medical claims and life insurance premiums are paid.
See note 11 to the Consolidated Financial Statements for discussion of the FASB’s project to reconsider the
accounting for postretirement benefits, including pensions.
Funded Status
Projected Benefit Obligation (PBO) – The PBO of our pension plans is the present value of benefits earned to date
by plan participants, including the effect of assumed future salary increases. The PBO of the OPEB plan is equal to
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