Note 5 - Debt and Related Interest Costs

Link to the 2001 Annual Report front page

Financial Statements 2001

NOTES to the FINANCIAL statements

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5 DEBT AND RELATED INTEREST COSTS

Under the Postal Reorganization Act, as amended by Public Law 101-227, we can issue debt obligations. However, we are limited to net annual increases of $2 billion in our debt for capital improvements and to $1 billion for operating expenses. Our total debt cannot exceed $15 billion.

Debt is due as follows (dollars in millions):

Year	Amount
2002	$ 5,564
2003	1,150
2004	-
2005	-
2006	950
After 2006	3,651

Cash outlays for interest were $339 million in 2001, $263 million in 2000, and $202 million in 1999.

At year end, the current estimated market value of our debt is $11,650 million in 2001 and $9,316 million in 2000 (Note 2). All notes payable to the Federal Financing Bank (FFB) may be repurchased at current value at any time with five days notice of intent to do so.

**Our Debt Consists of the Following:**
(dollars in millions)
Interest		September 30
Rate %	Terms*	2001	2000


Notes Payable to the Federal Financing Bank (FFB):

6.323	Payable December 28, 2000	$ -	$ 800
6.333	Payable March 1, 2001	-	500
6.183	Payable May 31, 2001	-	800
7.800	Payable $15 million each year to May 31, 2001	-	15
6.323	Repurchasable at par November 30, 2000, February 28, 2001 and May 31, 2001	-	1,000
8.760	Payable $36 million each year to May 31, 2001	-	36
2.521**	Overnight revolving credit facility; final maturity date March 13, 2002	363	262
2.489	Payable March 28, 2002	800	-
2.501	Floating rate; payable December 28, 2001, March 28, 2002 and June 28, 2002	1,000	-
5.568	Payable December 31, 2002	200	200
4.543	Payable February 28, 2003	200	-
2.501***	Short-term, floating rate, revolving credit facility; final maturity date March 12, 2003	3,400	3,400
3.858	Payable July 31, 2003	750	-
4.780	Payable November 15, 2005	200	-
5.412	Payable November 15, 2005	500	-
4.437	Payable May 15, 2006	250	-
5.688	Payable August 15, 2007	400	400
5.546	Payable August 15, 2007	150	150
5.426	Payable May 15, 2008	200	200
4.981	Payable May 15, 2008	200	200
4.910	Payable May 15, 2008	200	200
5.355	Payable August 16, 2010	500	-
4.999	Payable February 15, 2011	200	-
4.925	Payable August 15, 2011	200	-
5.959	Payable November 15, 2027	400	400
5.726	Payable November 15, 2027	100	100
5.606	Payable November 15, 2027	300	300
4.836	Payable November 15, 2027	100	100
6.299	Payable May 15, 2030	250	250
5.591	Payable May 15, 2030	250	-
5.417	Payable February 18, 2031	200	-
		11,313	9,313
Mortgage Notes Payable:
6.00 to 9.25	Maturing from fiscal years 2002 through 2039 secured by land, buildings and equipment with a carrying amount of $15 million.	2	3
		11,315	9,316
Less current portion of debt		5,564	6,814
		$ 5,751	$ 2,502

*	All debt is repurchasable at any time at a price determined by then current FFB rates.
**	Prior year rate was 6.350%.
***	Prior year rate was 6.323%.

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