Union Pacific 2006 Annual Report Download - page 62

depending upon our senior unsecured debt ratings. The facilities require the maintenance of a minimum net
worth and a debt to net worth coverage ratio. At December 31, 2006, we were in compliance with these covenants.
The facilities do not include any other financial restrictions, credit rating triggers (other than rating-dependent
pricing), or any other provision that could require the posting of collateral.
In addition to our revolving credit facilities, we had $150 million in uncommitted lines of credit available,
including $75 million that expires in March 2007 and $75 million expiring in May 2007. Neither of these lines of
credit were used as of December 31, 2006. We must have equivalent credit available under our five-year facilities
to draw on these $75 million lines.
Dividend Restrictions – We are subject to certain restrictions related to the payment of cash dividends to our
shareholders due to minimum net worth requirements under the credit facilities referred to above. The amount of
retained earnings available for dividends was $7.8 billion and $6.2 billion at December 31, 2006 and 2005,
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 $323 million in 2006 and $316
million in 2005.
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, 2006, 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.
6. 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, 2006
were as follows:
Millions of Dollars
Operating
Leases
Capital
Leases
2007 ..................................................................... $ 624 $ 180
2008 ..................................................................... 546 173
2009 ..................................................................... 498 168
2010 ..................................................................... 456 148
2011 ..................................................................... 419 157
Later Years ................................................................ 2,914 1,090
Total minimum lease payments ............................................... $5,457 $1,916
Amount representing interest ................................................. N/A (680)
Present value of minimum lease payments ...................................... N/A $1,236
Rent expense for operating leases with terms exceeding one month was $798 million in 2006, $728 million in
2005, and $651 million in 2004. When cash rental payments are not made on a straight-line basis, we recognize
variable rental expense on a straight-line basis over the lease term. Contingent rentals and sub-rentals are not
significant.
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