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Note 14 - Debt
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Debt Disclosure [Text Block]

14. Debt

 

Total debt as of December 31, 2023 and 2022, is summarized below:

 

Millions

 

2023

  

2022

 

Notes and debentures, 2.2% to 7.1% due through February 14, 2072

 $33,383  $33,658 

Equipment obligations, 2.6% to 6.2% due through January 2, 2031 [a]

  770   809 

Finance leases, 3.1% to 6.8% due through December 10, 2028

  158   234 

Commercial paper

  -   200 

Receivables Facility (Note 10)

  -   100 

Term loans

  -   100 

Unamortized discount and deferred issuance costs

  (1,732)  (1,775)

Total debt

  32,579   33,326 

Less: current portion

  (1,423)  (1,678)

Total long-term debt

 $31,156  $31,648 

 

[a]Equipment obligations are secured by an interest in certain railroad equipment with a carrying value of approximately $0.9 billion at both December 31, 2023 and 2022.

 

Debt Maturities – The following table presents aggregate debt maturities as of December 31, 2023, excluding market value adjustments:

 

Millions

    

2024

 $1,427 

2025

  1,426 

2026

  1,515 

2027

  1,285 

2028

  1,235 

Thereafter

  27,423 

Total principal

  34,311 

Unamortized discount and deferred issuance costs

  (1,732)

Total debt

 $32,579 

 

Debt Redemption – On  April 15, 2022, we redeemed all $750 million of outstanding 4.163% notes due July 15, 2022, at a redemption price equal to 100% of the principal amount of the notes plus accrued and unpaid interest.

 

Credit Facilities – At December 31, 2023, we had $2.0 billion of credit available under our revolving credit facility, which is designated for general corporate purposes and supports the issuance of commercial paper. Credit facility withdrawals totaled $0 during 2023. 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 Term Secured Overnight Financing Rate (SOFR), plus a spread, depending upon credit ratings for our senior unsecured debt. The Facility, set to expire May 20, 2027, requires UPC to maintain an adjusted debt-to-EBITDA (earnings before interest, taxes, depreciation, and amortization) coverage ratio.

 

The definition of debt used for purposes of calculating the adjusted debt-to-EBITDA coverage ratio includes, among other things, certain credit arrangements, finance leases, guarantees, unfunded and vested pension benefits under Title IV of ERISA, and unamortized debt discount and deferred debt issuance costs. At December 31, 2023, the Company was in compliance with the adjusted debt-to-EBITDA coverage ratio, which allows us to carry up to $44.4 billion of debt (as defined in the Facility), and we had $34.3 billion of debt (as defined in the Facility) outstanding at that date. 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 $150 million cross-default provision and a change-of-control provision.

 

During 2023, we issued $1.4 billion and repaid $1.6 billion of commercial paper with maturities ranging from 11 to 64 days. As of December 31, 2023 and 2022, we had $0 and $200 million of commercial paper outstanding, respectively. Our revolving credit facility supports our outstanding commercial paper balances, and, unless we change the terms of our commercial paper program, our aggregate issuance of commercial paper will not exceed the amount of borrowings available under the Facility.

 

Shelf Registration Statement and Significant New Borrowings – In 2022, the Board of Directors reauthorized the issuance of up to $12.0 billion of debt securities. Under our 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.

 

During 2023, we issued the following unsecured, fixed-rate debt securities under our shelf registration:

 

Date

Description of Securities

February 21, 2023

$0.50 billion of 4.750% Notes due February 21, 2026

 $0.50 billion of 4.950% Notes due May 15, 2053

 

We used the net proceeds from the offerings for general corporate purposes, including the repurchase of common stock pursuant to our share repurchase programs. These debt securities include change-of-control provisions. At December 31, 2023, we had remaining authority to issue up to $5.6 billion of debt securities under our shelf registration.

 

Receivables Securitization Facility – As of December 31, 2023 and 2022, we recorded $0 and $100 million, respectively, of borrowings under our Receivables Facility, as secured debt. (See further discussion of our "Receivables Securitization Facility" section in Note 10.)