Union Pacific 2011 Annual Report Download - page 78

78
Debt Maturities – The following table presents aggregate debt maturities as of December 31, 2011,
excluding market value adjustments:
Millions
2012 $ 309
2013 636
2014 706
2015 467
2016 517
Thereafter 6,271
Total debt $ 8,906
As of both December 31, 2011 and December 31, 2010, we have reclassified as long-term debt
approximately $100 million of debt due within one year that we intend to refinance. This reclassification
reflects our ability and intent to refinance any short-term borrowings and certain current maturities of long-
term debt on a long-term basis.
Mortgaged Properties – Equipment with a carrying value of approximately $2.9 billion and $3.2 billion at
December 31, 2011 and 2010, respectively, served as collateral for capital leases and other types of
equipment obligations in accordance with the secured financing arrangements utilized to acquire such
railroad equipment.
As a result of the merger of Missouri Pacific Railroad Company (MPRR) with and into UPRR on January
1, 1997, and pursuant to the underlying indentures for the MPRR mortgage bonds, UPRR must maintain
the same value of assets after the merger in order to comply with the security requirements of the
mortgage bonds. As of the merger date, the value of the MPRR assets that secured the mortgage bonds
was approximately $6.0 billion. In accordance with the terms of the indentures, this collateral value must
be maintained during the entire term of the mortgage bonds irrespective of the outstanding balance of
such bonds.
Credit Facilities – During the second quarter of 2011, we replaced our $1.9 billion revolving credit
facility, which was scheduled to expire in April 2012, with a new $1.8 billion facility that expires in May
2015 (the facility). The facility is based on substantially similar terms as those in the previous credit
facility. On December 31, 2011, we had $1.8 billion of credit available under the facility, which is
designated for general corporate purposes and supports the issuance of commercial paper. We did not
draw on either facility during 2011. Commitment fees and interest rates payable under the facility are
similar to fees and rates available to comparably rated, investment-grade borrowers. The facility allows for
borrowings at floating rates based on London Interbank Offered Rates, plus a spread, depending upon
our senior unsecured debt ratings. The facility requires the Corporation to maintain a debt-to-net-worth
coverage ratio as a condition to making a borrowing. At December 31, 2011, and December 31, 2010
(and at all times during the year), we were in compliance with this covenant.
The definition of debt used for purposes of calculating the debt-to-net-worth coverage ratio includes,
among other things, certain credit arrangements, capital leases, guarantees and unfunded and vested
pension benefits under Title IV of ERISA. At December 31, 2011, the debt-to-net-worth coverage ratio
allowed us to carry up to $37.2 billion of debt (as defined in the facility), and we had $9.5 billion of debt
(as defined in the facility) outstanding at that date. Under our current capital plans, we expect to continue
to satisfy the debt-to-net-worth coverage ratio; however, many factors beyond our reasonable control
(including the Risk Factors in Item 1A of this report) could affect our ability to comply with this provision in
the future. The facility does not include any other financial restrictions, credit rating triggers (other than
rating-dependent pricing), or any other provision that could require us to post collateral. The facility also
includes a $75 million cross-default provision and a change-of-control provision.
During 2011, we did not issue or repay any commercial paper and, at December 31, 2011, we had no
commercial paper outstanding. Outstanding commercial paper balances are supported by our revolving
credit facility but do not reduce the amount of borrowings available under the facility.
Dividend Restrictions – Our revolving credit facility includes a debt-to-net worth covenant (discussed in
the Credit Facilities section above) that, under certain circumstances, restricts the payment of cash