Union Pacific 2002 Annual Report Download - page 53

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The following tables identify material obligations and commitments as of December 31, 2002:
Payments Due by Period
Contractual Obligations Less Than After
Millions of Dollars Total 1 Year 2-3 Years 4-5 Years 5 Years
Debt (note 5)[a] ............................................ $ 6,194 $ 169 $ 1,144 $ 1,259 $ 3,622
Operating leases (note 6).............................. 3,301 444 761 577 1,519
Capital lease obligations (note 6)................. 2,446 210 407 360 1,469
Unconditional purchase obligations
(note 10)[b].............................................. 404 224 180 - -
Total contractual obligations........................ $12,345 $1,047 $ 2,492 $ 2,196 $ 6,610
[a] Excludes capital lease obligations of $1,458 million and market value adjustments for debt with qualifying hedges that are recorded as
assets on the Consolidated Statements of Financial Position.
[b] Unconditional purchase obligations represent multi-year contractual commitments to purchase assets at fixed prices and fixed volumes.
These commitments are made in order to take advantage of pricing opportunities and to insure availability of assets to meet quality and
operational requirements. Excluded are annual contracts made in the normal course of business for performance of routine services, as
well as commitments where contract provisions allow for cancellation.
Amount of Commitment Expiration
Per Period
Total
Other Commercial Commitments Amounts Less Than After
Millions of Dollars Committed 1 Year 2-3 Years 4-5 Years 5 Years
Credit facilities (note 5)................................ $ 1,875 $ 875 $ 1,000 $ - $ -
Convertible preferred securities (note 5)..... 1,500---1,500
Sale of receivables (note 2) ........................... 600 600---
Guarantees (note 10)[a]................................ 368 14 22 13 319
Standby letters of credit (note 10) ............... 76 69 7 - -
Total commercial commitments .................. $ 4,419 $ 1,558 $ 1,029 $13 $ 1,819
[a] Includes guaranteed obligations of affiliated operations.
Financing Activities
Credit Facilities – The Corporation had no commercial paper borrowings outstanding as of December 31, 2002.
Commercial paper is issued from time to time for working capital needs and is supported by $1.875 billion in credit facilities,
of which $875 million expires in March 2003, with the remaining $1.0 billion expiring in 2005. The credit facility for $875
million includes $825 million that was entered into during March 2002 and $50 million entered into during June 2002. The
$1.0 billion credit facility was entered into during March 2000. The Corporation has the option to hold higher cash balances
in addition to or in replacement of the credit facilities to support commercial paper. These credit facilities also allow for
borrowings at floating (LIBOR-based) rates, plus a spread, depending upon the Corporation’s senior unsecured debt ratings.
The credit facilities are designated for general corporate purposes, and none of the credit facilities were used as of December
31, 2002. Commitment fees and interest rates payable under the facilities are similar to fees and rates available to comparably
rated investment-grade borrowers. The Corporation is reviewing rollover options for the credit facility that expires in March
2003.
Shelf Registration Statement – During January 2002, under an existing shelf registration statement, the Corporation issued
$300 million of 6-1/8% fixed rate debt with a maturity of January 15, 2012. The proceeds from the issuance were used for
repayment of debt and other general corporate purposes. In April 2002, the Corporation called its $150 million, 8-5/8%
debentures due May 15, 2022 for redemption in May 2002. The Corporation issued $350 million of 6-1/2% fixed rate debt
with a maturity of April 15, 2012, in order to fund the redemption. The Corporation used the remaining proceeds to repay
other debt and for other general corporate purposes. On May 17, 2002, the Corporation issued the remaining $50 million
of debt under the existing shelf registration statement. The debt carries a fixed rate of 5-3/4% with a maturity of October
15, 2007. The proceeds from the issuance were used for repayment of debt and other general corporate purposes.