Union Pacific 2011 Annual Report Download - page 79

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dividends to our shareholders. The amount of retained earnings available for dividends was $13.8 billion
and $12.9 billion at December 31, 2011 and 2010, respectively.
Shelf Registration Statement and Significant New Borrowings – Under our current shelf registration,
we 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. We have no immediate plans to
issue equity securities; however, we will continue to explore opportunities to replace existing debt or
access capital through issuances of debt securities under our shelf registration, and, therefore, we may
issue additional debt securities at any time.
During 2011, we issued the following unsecured, fixed-rate debt securities under our current shelf
registration:
Date Description of Securities
August 9, 2011 $500 million of 4.75% Notes due September 15, 2041
The net proceeds from the offering were used for general corporate purposes, including the repurchase of
common stock pursuant to our share repurchase program. These debt securities include change-of-
control provisions. At December 31, 2011, we had remaining authority to issue up to $2.0 billion of debt
securities under our shelf registration.
During the third quarter of 2011, we renegotiated and extended for three years on substantially similar
terms a $100 million floating-rate term loan, which will mature on August 5, 2016.
Debt Exchange – On June 23, 2011, we exchanged $857 million of various outstanding notes and
debentures due between 2013 and 2019 (Existing Notes) for $750 million of 4.163% notes (New Notes)
due July 15, 2022, plus cash consideration of approximately $267 million and $17 million for accrued and
unpaid interest on the Existing Notes. The cash consideration was recorded as an adjustment to the
carrying value of debt, and the balance of the unamortized discount and issue costs from the Existing
Notes is being amortized as an adjustment of interest expense over the term of the New Notes. No gain
or loss was recognized as a result of the exchange. Costs related to the debt exchange that were
payable to parties other than the debt holders totaled approximately $6 million and were included in
interest expense during 2011.
The following table lists the outstanding notes and debentures that were exchanged:
Principal amount
Millions exchanged
7.875% Notes due 2019 $ 196
5.450% Notes due 2013 50
5.125% Notes due 2014 45
5.375% Notes due 2014 55
5.700% Notes due 2018 277
5.750% Notes due 2017 178
7.000% Debentures due 2016 38
5.650% Notes due 2017 18
Total $ 857
On July 14, 2010, we exchanged $376 million of 7.875% notes due in 2019 (Existing Notes) for 5.78%
notes (New Notes) due July 15, 2040, plus cash consideration of approximately $96 million and $15
million for accrued and unpaid interest on the Existing Notes. The cash consideration was recorded as an
adjustment to the carrying value of debt, and the balance of the unamortized discount and issue costs
from the Existing Notes is being amortized as an adjustment of interest expense over the term of the New
Notes. There was no gain or loss recognized as a result of the exchange. Costs related to the debt
exchange that were payable to parties other than the debtholders totaled approximately $2 million and
were included in interest expense during the third quarter.
Debt Redemptions – On December 19, 2011, we redeemed the remaining $175 million of our 6.5%
notes due April 15, 2012, and all $300 million of our outstanding 6.125% notes due January 15, 2012.