Union Pacific 2011 Annual Report Download - page 40

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40
The Railroad collected approximately $18.8 billion and $16.3 billion of receivables during the years ended
December 31, 2011 and 2010, respectively. UPRI used certain of these proceeds to purchase new
receivables under the facility.
The costs of the receivables securitization facility include interest, which will vary based on prevailing
commercial paper rates, program fees paid to banks, commercial paper issuing costs, and fees for
unused commitment availability. The costs of the receivables securitization facility are included in interest
expense and were $4 million and $6 million for 2011 and 2010, respectively. Prior to adoption of the new
accounting standard, the costs of the receivables securitization facility were included in other income and
were $9 million for 2009.
The investors have no recourse to the Railroad’s other assets, except for customary warranty and
indemnity claims. Creditors of the Railroad do not have recourse to the assets of UPRI.
In August 2011, the receivables securitization facility was renewed for an additional 364-day period at
comparable terms and conditions.
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, 2011:
Payments Due by December 31,
Contractual Obligations Afte
r
Millions Tota
l
2012 2013 2014 2015 2016 2016 Othe
r
Debt [a] $ 12,516 $ 538 $ 852 $ 887 $ 615 $ 652 $ 8,972 $ -
Operating leases [b] 4,528 525 489 415 372 347 2,380 -
Capital lease obligations [c] 2,559 297 269 276 276 262 1,179 -
Purchase obligations [d] 5,137 2,598 568 560 276 245 858 32
Other post retirement benefits [e] 249 26 26 26 26 26 119 -
Income tax contingencies [f] 107 31 - - - - - 76
Total contractual obligations $ 25,096 $ 4,015 $ 2,204 $ 2,164 $ 1,565 $ 1,532 $ 13,508 $ 108
[a] Excludes capital lease obligations of $1,874 million and unamortized discount of $364 million. Includes an interes
t
component of $5,120 million.
[b] Includes leases for locomotives, freight cars, other equipment, and real estate.
[c] Represents total obligations, including interest component of $685 million.
[d] Purchase obligations include locomotive maintenance contracts; purchase commitments for fuel purchases, locomotives,
ties, ballast, and rail; and agreements to purchase other goods and services. For amounts where we cannot reasonabl
y
estimate the year of settlement, they are reflected in the Other column.
[e] 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 obligations as no contributions are
currently required.
[f] Future cash flows for income tax contingencies reflect the recorded liability for unrecognized tax benefits, including interes
t
and penalties, as of December 31, 2011. Where we can reasonably estimate the years in which these liabilities may be
settled, this is shown in the table. For amounts where we cannot reasonably estimate the year of settlement, they are
reflected in the Other column.