Union Pacific 2001 Annual Report Download - page 72

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Debt Maturities – Aggregate debt maturities as of December 31, 2001, are as follows:
Millions of Dollars
2002 ............................................................................................................................................................ $ 194
2003 ............................................................................................................................................................ 1,156
2004 ............................................................................................................................................................ 503
2005 ............................................................................................................................................................ 680
2006 ............................................................................................................................................................ 685
Thereafter................................................................................................................................................... 4,862
Total debt ................................................................................................................................................... $8,080
Mortgaged Properties – At December 31, 2001 and 2000, approximately $9.4 billion and $9.6 billion, respectively, of
Railroad properties secure outstanding equipment obligations and mortgage bonds.
Credit Facilities – On December 31, 2001, the Corporation had $2.0 billion in revolving credit facilities, of which $1.0
billion expires in March 2002, with the remaining $1.0 billion expiring in 2005. The facilities, which were entered into
during March 2001, and March 2000, respectively, are designated for general corporate purposes and replaced a $2.8
billion facility which expired in April 2001. None of the credit facilities were used as of December 31, 2001 or 2000.
Commitment fees and interest rates payable under the facilities are similar to fees and rates available to comparably rated
investment-grade corporate borrowers. The Corporation is reviewing rollover options for the credit facility that expires
in March 2002. To the extent the Corporation has long-term credit facilities available, commercial paper borrowings and
other current maturities of long-term debt of $674 million and $663 million as of December 31, 2001 and 2000,
respectively, have been reclassified as long-term debt maturing in the years 2003 and 2002, respectively. This
reclassification reflects the Corporation’s intent to refinance these short-term borrowings and current maturities of long-
term debt on a long-term basis through the issuance of additional commercial paper or new long-term financings, or by
using the currently available long-term credit facility if alternative financing is not available.
Convertible Preferred Securities – Union Pacific Capital Trust (the Trust), a statutory business trust sponsored and
wholly owned by the Corporation, issued $1.5 billion aggregate liquidation amount of 6.25% Convertible Preferred
Securities (the CPS) in April 1998. Each of the CPS has a stated liquidation amount of $50 and is convertible, at the
option of the holder, into shares of UPC’s common stock, par value $2.50 per share (the Common Stock), at the rate of
0.7257 shares of Common Stock for each of the CPS, equivalent to a conversion price of $68.90 per share of Common
Stock, subject to adjustment under certain circumstances. The CPS accrues and pays cash distributions quarterly in
arrears at the annual rate of 6.25% of the stated liquidation amount. The Corporation owns all of the common securities
of the Trust. The proceeds from the sale of the CPS and the common securities of the Trust were invested by the Trust
in $1.5 billion aggregate principal amount of the Corporation’s 6.25% Convertible Junior Subordinated Debentures due
April 1, 2028 (the Debentures). The Debentures represent the sole assets of the Trust. The principal amount of the
Debentures held by the Trust at December 31, 2001, was $1.5 billion.
The Debentures accrue and pay interest quarterly in arrears at the annual rate of 6.25%. The Debentures mature on
April 1, 2028, unless previously redeemed or repurchased in accordance with the terms of the indenture (the Indenture).
The proceeds from the issuance of the Debentures were used by the Corporation for repayment of corporate borrowings.
The Corporation has guaranteed, on a subordinated basis, distributions and other payments due on the CPS (the
Guarantee). Considered together, the Corporation’s obligations under the Debentures, the Indenture, the Guarantee and
the Amended and Restated Declaration of Trust governing the Trust provide a full and unconditional guarantee by the
Corporation of the Trust’s obligations under the CPS.
For financial reporting purposes, the Corporation has recorded distributions payable on the CPS as an interest charge
to earnings in the Consolidated Statements of Income.
Shelf Registration Statement and Other Significant Financings – In January 2001, under an existing shelf registration
statement, the Corporation issued $400 million of 6.65% fixed-rate debt with a maturity date of January 15, 2011. During