Union Pacific 2010 Annual Report Download - page 40

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40
Contractual Obligations and Commercial Commitments
As described in the notes to the Consolidated Financial Statements and as referenced in the tables
below, we have contractual obligations and commercial commitments that may affect our financial
condition. Based on our assessment of the underlying provisions and circumstances of our contractual
obligations and commercial commitments, including material sources of off-balance sheet and structured
finance arrangements, other than the risks that we and other similarly situated companies face with
respect to the condition of the capital markets (as described in Item 1A of Part II of this report), there is
no known trend, demand, commitment, event, or uncertainty that is reasonably likely to occur that would
have a material adverse effect on our consolidated results of operations, financial condition, or liquidity. In
addition, our commercial obligations, financings, and commitments are customary transactions that are
similar to those of other comparable corporations, particularly within the transportation industry.
The following tables identify material obligations and commitments as of December 31, 2010:
Payments Due by December 31,
Contractual Obligations Afte
r
Millions Tota
l
2011 2012 2013 2014 2015 2015 Othe
r
Debt [a] $ 12,392 $ 594 $ 926 $ 998 $ 979 $ 604 $ 8,291 $ -
Operating leases 4,921 613 526 461 382 340 2,599 -
Capital lease obligations [b] 2,693 311 251 253 261 262 1,355 -
Purchase obligations [c] 3,820 1,395 484 375 357 223 954 32
Other post retirement benefits [d] 256 27 27 27 26 26 123 -
Income tax contingencies [e] 86 68 - - - - - 18
Total contractual obligations $ 24,168 $ 3,008 $ 2,214 $ 2,114 $ 2,005 $ 1,455 $ 13,322 $ 50
[a] Excludes capital lease obligations of $1,909 million and unamortized discount of $198 million. Includes an interes
t
component of $4,861 million.
[b] Represents total obligations, including interest component of $784 million.
[c] Includes locomotive maintenance contracts; purchase commitments for locomotives, freight cars, containers, fuel, ties,
ballast, and rail; and agreements to purchase other goods and services. For amounts where we can not reasonabl
y
estimate the year of settlement, the commitments are reflected in the Other column.
[d] Includes estimated other post retirement, medical, and life insurance payments and payments made under the unfunde
d
p
ension plan for the next ten years. No amounts are included for funded pension as no contributions are currently required.
[e] Income tax contingencies reflect the recorded liability for unrecognized tax benefits, including interest and penalties, as o
f
December 31, 2010. Where we can reasonably estimate the years in which these liabilities may be settled, this is shown in
the table. For amounts where we can not reasonably estimate the year of settlement, the obligations are reflected in the
Other column.
Amount of Commitment Expiration per Period
Other Commercial Commitments
A
fte
r
Millions Tota
l
2011 2012 2013 2014 2015 2015
Credit facilities [a] $ 1,900 $- $ 1,900 $- $- $- $-
Receivables securitization facility [b] 600 600 - - - - -
Guarantees [c] 382 66 27 10 214 12 53
Standby letters of credit [d] 23 19 4 - - - -
Total commercial commitments $ 2,905 $ 685 $ 1,931 $ 10 $ 214 $ 12 $ 53
[a] None of the credit facility was used as of December 31, 2010.
[b] $100 million of the receivables securitization facility was utilized at December 31, 2010, which is accounted for as debt. The
full program matures in August 2011.
[c] Includes guaranteed obligations related to our headquarters building, equipment financings, and affiliated operations.
[d] None of the letters of credit were drawn upon as of December 31, 2010.
Off-Balance Sheet Arrangements
Guarantees – At December 31, 2010, we were contingently liable for $382 million in guarantees. We
have recorded a liability of $3 million for the fair value of these obligations as of December 31, 2010 and
2009. We entered into these contingent guarantees in the normal course of business, and they include
guaranteed obligations related to our headquarters building, equipment financings, and affiliated