Union Pacific 2001 Annual Report Download - page 73

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47
May 2001, the Corporation issued the remaining $200 million of debt securities available under this shelf registration
statement as 5.84% fixed-rate debt with a maturity date of May 25, 2004. Simultaneously, the Corporation entered into
an interest rate swap converting the debt, issued in May 2001, from a fixed rate to a variable rate. The proceeds from the
issuance of this debt were used for repayment of debt and other general corporate purposes.
In June 2001, the Corporation filed a new $1.0 billion shelf registration statement, which became effective June 14,
2001. Under this shelf registration statement, the Corporation may issue, from time to time, any combination of debt
securities, preferred stock, common stock or warrants for debt securities or preferred stock in one or more offerings. The
total offering price of these securities, in the aggregate, can not exceed $1.0 billion. On October 1, 2001, the Corporation
issued $300 million of 5.75% fixed-rate debt with a maturity date of October 15, 2007. The proceeds from the issuance
of this debt were used for repayment of debt and other general corporate purposes. At December 31, 2001, the
Corporation had $700 million remaining for issuance under the shelf registration.
On January 17, 2002, the Corporation issued an additional $300 million of 6.125% fixed-rate debt with a maturity
date of January 15, 2012. The proceeds from the issuance were also used for repayment of debt and other general
corporate purposes. At January 24, 2002, the Corporation had $400 million remaining for issuance under the shelf
registration. The Corporation has no immediate plans to issue equity securities under this shelf registration.
During July 2001, UPRR entered into capital leases covering new locomotives. The related capital lease obligations
totaled approximately $124 million and are included in the Statements of Consolidated Financial Position as debt.
Dividend Restrictions – The Corporation is subject to certain restrictions related to the payment of cash dividends. The
amount of retained earnings available for dividends under the most restrictive test was $4.1 billion and $3.2 billion at
December 31, 2001 and 2000, respectively.
8. Leases
The Corporation leases certain locomotives, freight cars, trailers 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, 2001 were as follows:
Millions of Dollars Operating Leases Capital Leases
2002 .............................................................................................................................. $ 435 $ 207
2003 .............................................................................................................................. 342 217
2004 .............................................................................................................................. 309 186
2005 .............................................................................................................................. 299 190
2006 .............................................................................................................................. 247 154
Later Years................................................................................................................... 1,690 1,498
Total minimum lease payments .................................................................................. $3,322 2,452
Amount representing interest ..................................................................................... (1,011)
Present value of minimum lease payments ................................................................ $ 1,441
Rent expense for operating leases with terms exceeding one month was $668 million in 2001, $652 million in 2000 and
$707 million in 1999. Contingent rentals and sub-rentals are not significant.
9. Retirement Plans
Benefit Summary – The Corporation provides defined benefit retirement income to eligible non-union employees
through qualified and non-qualified (supplemental) pension plans. In addition, the Corporation provides a defined
contribution plan (thrift plan) to eligible non-union employees. All non-union and certain of the Corporation’s union
employees participate in defined contribution medical and life insurance programs for retirees. All Railroad employees
are covered by the Railroad Retirement System (the System).