Union Pacific 2001 Annual Report Download - page 71

45
Deferred income tax liabilities (assets) were comprised of the following at December 31, 2001 and 2000:
Millions of Dollars 2001 2000
Current liabilities................................................................................................................ $ (341) $ (404)
Net operating loss ............................................................................................................... (59) (103)
Net current deferred income tax asset ............................................................................... (400) (507)
Excess tax over book depreciation ..................................................................................... 7,813 7,670
State taxes, net..................................................................................................................... 577 517
Retirement benefits............................................................................................................. (287) (282)
Alternative minimum tax credits....................................................................................... (315) (187)
Net operating loss ............................................................................................................... (96) (342)
Other ................................................................................................................................... 190 185
Net long-term deferred income tax liability...................................................................... 7,882 7,561
Net deferred income tax liability........................................................................................ $7,482 $7,054
At December 31, 2001, the Corporation has a deferred income tax asset reflecting the benefits of $442 million in net
operating loss carryforwards, which expire between 2009 and 2018. The Internal Revenue Code limits a corporation's
ability to utilize net operating loss carryforwards. The Corporation does not expect these limits to impact its ability to
utilize its carryforwards. The Corporation has analyzed its deferred income tax assets and believes a valuation allowance
is not necessary.
For the years ending December 31, 2001, 2000 and 1999, a reconciliation between statutory and effective tax rates of
continuing operations is as follows:
Percentages 2001 2000 1999
Statutory tax rate.................................................................................................... 35.0% 35.0% 35.0%
State taxes-net......................................................................................................... 2.5 1.4 0.8
Dividend exclusion................................................................................................. (0.8) (1.1) (1.0)
Tax settlements....................................................................................................... (0.1) - (1.3)
Other....................................................................................................................... 0.4 0.4 1.4
Effective tax rate..................................................................................................... 37.0% 35.7% 34.9%
The Internal Revenue Service is currently examining the Corporation's tax returns for 1986 through 1998. All years
prior to 1986 are closed. The Corporation believes it has adequately provided for federal and state income taxes.
7. Debt
Total debt as of December 31, 2001 and 2000, is summarized below:
Millions of Dollars 2001 2000
Notes and debentures, 0% to 9.6% due through 2054 .............................................................. $4,682 $4,472
Capitalized leases ......................................................................................................................... 1,441 1,435
Medium-term notes, 6.3% to 10.0% due through 2020 ........................................................... 736 843
Equipment obligations, 6.3% to 10.3% due through 2019 ....................................................... 619 842
Term floating-rate debt, 3.2% to 3.4% due through 2002 ........................................................ 300 362
Mortgage bonds, 4.3% to 4.8% due through 2030 .................................................................... 153 154
Tax-exempt financings, 3.3% to 5.7% due through 2026 ......................................................... 168 168
Commercial paper and bid notes, average of 5.1% in 2001 and 6.8% in 2000 ........................ 34 125
Unamortized discount ................................................................................................................ (53) (50)
Total debt ..................................................................................................................................... 8,080 8,351
Less current portion .................................................................................................................... (194) (207)
Total long-term debt ................................................................................................................... $7,886 $8,144