================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
April 21, 2005
United Parcel Service, Inc.
(Exact name of registrant as specified in its charter)
Delaware 001-15451 58-2480149
-------- --------- ----------
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification Number)
of incorporation)
55 Glenlake Parkway, N.E.
Atlanta, Georgia 30328
---------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (404) 828-6000
Not applicable
--------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
================================================================================
Item 1.01. Entry into a Material Definitive Agreement.
The information included pursuant to Item 2.03 is incorporated under
this Item 1.01.
Item 1.02. Termination of a Material Definitive Agreement.
As of April 21, 2005, in connection with our entry into the new credit
facilities described in Item 2.03 hereof, we terminated (a) the $1.0 billion
364-day revolving credit facility, dated as of April 22, 2004, with the banks,
financial institutions and other institutional lenders signatory thereto, and
Citibank, N.A. as administrative agent, and (b) the $1.0 billion five-year
revolving credit facility, dated as of April 24, 2003, with the banks, financial
institutions and other lenders signatory thereto and Citibank, N.A. as
administrative agent. The prior credit facilities would have expired on April
21, 2005 and April 24, 2008, respectively.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
On April 21, 2005, we entered into a new $1.0 billion 364-Day revolving
credit facility (the "364-Day Facility") with a syndicate of commercial banks,
including Citibank, N.A. as administrative agent ("Citibank" or the "Agent") and
a new five-year $1.0 billion unsecured revolving credit facility (the "Five-Year
Facility") with a syndicate of commercial banks, including Citibank as the
administrative agent. The material terms and conditions of the 364-Day Facility
and the Five-Year Facility are as set forth below.
The 364-Day Facility
Generally, amounts outstanding under the 364-Day Facility bear interest at
a "base rate" or a "Eurocurrency Rate". Base-rate advances are denominated in
U.S. Dollars, and amounts outstanding bear interest at a fluctuating rate equal
to Citibank's base rate. Eurocurrency rate advances can be denominated in a
variety of currencies, including U.S. Dollars, and amounts outstanding bear
interest at a periodic fixed interest rate equal to LIBOR for the applicable
currency plus a margin equal to 0.125%. Interest on both base rate and
Eurocurrency rate advances are payable quarterly and in arrears.
The 364-Day Facility will mature and all amounts outstanding thereunder
will be due and payable on April 20, 2006, provided, however, that we may
request renewal of the facility for an additional 364-day period or convert all
amounts outstanding thereunder into a three-year term loan which would mature on
April 20, 2009. Should we exercise our option to convert advances under the
364-Day Facility into such a term loan, base rate advances would continue to
bear interest at the same rate discussed above. Eurocurrency rate advances would
also continue to bear interest at a fixed periodic rate equal to LIBOR for the
applicable currency, however, the applicable margin would increase and be
determined by reference to our debt ratings from Standard & Poor's and Moody's.
This margin would range from 0.3% to 0.5%.
We may request the Agent to solicit competitive bids from the lenders under
the 364-Day Facility for advances with requested maturities of at least seven
days. Each of such lenders may bid at its discretion. We may accept one or more
of such bids, provided that the aggregate outstanding advances on the date of,
and after giving effect to, the competitive bid advance does not exceed the
aggregate commitments of all lenders under the 364-Day Facility. Each such
competitive bid advance must be at least $25 million and may be increased in
multiples of $1.0 million. While any such borrowing is outstanding, it will be
deemed a usage of the 364-Day Facility with regard to availability thereunder.
We are required to pay certain fees in connection with the 364-Day
Facility. For example, we must pay an annual facility fee quarterly in arrears
equal to 0.025% of the aggregate $1.0 billion commitment of the lenders under
the 364-Day Facility. Generally, however, we may reduce the aggregate commitment
of such lenders by terminating any unused amounts under the 364-Day Facility on
three days notice. Such reductions must be at least $25 million and are subject
to certain restrictions. We may also be required to pay certain fees to the
Agent, as we and the Agent may agree on from time-to-time, such as in connection
with a competitive bid advance.
The 364-Day Facility contains customary covenants regarding the
preservation and maintenance of our corporate existence, material compliance
with laws, payment of taxes, and maintenance of insurance and of our
properties. The 364-Day Facility also generally restricts us from incurring any
secured indebtedness without making provision for indebtedness under the
Five-Year Facility to be secured equally and ratably with such secured
indebtedness, and from entering into certain sale-leaseback transactions.
Further, the 364-Day Facility generally requires that we maintain a consolidated
minimum net worth of $3.0 billion. The 364-Day Facility includes customary
events of default, including, but not limited to, the failure to pay any
interest, principal or fees when due, the failure to perform any covenant or
agreement, inaccurate or false representations or warranties, insolvency or
bankruptcy, change of control, the occurrence of certain ERISA events and
judgment defaults.
We plan to use the proceeds from the 364-Day Facility for general corporate
purposes, including commercial paper backstop.
The Five-Year Facility
Generally, amounts outstanding under the Five-Year Facility bear interest
at a "base rate" or a "Eurocurrency Rate". Base rate advances are denominated in
U.S. Dollars, and amounts outstanding bear interest at a fluctuating rate equal
to Citibank's base rate. Eurocurrency rate advances can be denominated in a
variety of currencies, including U.S. Dollars, and amounts outstanding bear
interest at a periodic fixed rate equal to LIBOR for the applicable currency
plus an applicable margin. The applicable margins are based on our debt rating
from both Standard & Poor's and Moody's, with such margins ranging from 0.11% to
0.20%. Interest on both base rate and Eurocurrency rate advances are payable
quarterly and in arrears. The Five-Year Facility will mature and all amounts
outstanding thereunder will be due and payable on April 21, 2010. We may request
competitive bid advances under the Five-Year Facility on substantially the same
terms as those discussed above regarding the 364-Day Facility.
We are required to pay certain fees in connection with the Five-Year
Facility. For example, we must pay an annual facility fee. Such fee is payable
quarterly in arrears and is determined by reference to our debt rating from both
Standard & Poor's and Moody's. This facility fee ranges from 0.04% to 0.10% of
the aggregate $1.0 billion commitment of the lenders under the Five-Year
Facility. Generally, however, we may reduce the aggregate commitment of such
lenders on substantially the same terms as those discussed above regarding the
364-Day Facility. We may also be required to pay certain fees to the Agent, as
we and the Agent may agree on from time-to-time, such as in connection with a
competitive bid advance.
The Five-Year Facility contains covenants, restrictions and events of
default substantially similar to those discussed above with regard to the
364-day Facility.
We plan to use the proceeds from the Five-Year Facility for general
corporate purposes, including commercial paper backstop.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UNITED PARCEL SERVICE, INC.
Date: April 27, 2005 By: /s/ D. Scott Davis
---------------------------
Name: D. Scott Davis
Title: Senior Vice President,
Treasurer and Chief
Financial Officer