Union Pacific 2012 Annual Report Download - page 76

Download and view the complete annual report

Please find page 76 of the 2012 Union Pacific annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 101

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101

76
under present market conditions. It does not impact the financial statements under current accounting
rules. At December 31, 2012 and 2011, approximately $203 million and $303 million, respectively, of
fixed-rate debt securities contained call provisions that allow us to retire the debt instruments prior to final
maturity, with the payment of fixed call premiums, or in certain cases, at par. The fair value of our cash
equivalents approximates their carrying value due to the short-term maturities of these instruments.
14. Debt
Total debt as of December 31, 2012 and 2011, net of interest rate swaps designated as fair value
hedges, is summarized below:
Millions 2012 2011
Notes and debentures, 3.0% to 7.9% due through 2054 $ 6,950 $ 6,801
Capitalized leases, 3.1% to 9.2% due through 2028 1,848 1,874
Floating rate term loans, due through 2016 200 100
Equipment obligations, 6.2% to 6.7% due through 2031 119 147
Receivables Securitization (Note 10) 100 100
Mortgage bonds, 4.8% due through 2030 57 57
Tax-exempt financings, 1.8% to 5.7% due through 2022 56 159
Medium-term notes, 9.2% to 10.0% due through 2020 32 32
Unamortized discount (365) (364)
Total debt 8,997 8,906
Less: current portion (196) (209)
Total long-term debt $ 8,801 $ 8,697
Debt Maturities – The following table presents aggregate debt maturities as of December 31, 2012,
excluding market value adjustments:
Millions
2013 $ 296
2014 698
2015 442
2016 584
2017 753
Thereafter 6,224
Total debt $ 8,997
As of both December 31, 2012 and December 31, 2011, we have reclassified as long-term debt $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.
Equipment Encumbrances – Equipment with a carrying value of approximately $2.9 billion at both
December 31, 2012 and 2011 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.