UPS 2011 Annual Report Download - page 114

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following is a rollforward of our common stock, additional paid-in capital, and retained earnings
accounts (in millions, except per share amounts):
2011 2010 2009
Shares Dollars Shares Dollars Shares Dollars
Class A Common Stock
Balance at beginning of year .................... 258 $ 3 285 $ 3 314 $ 3
Common stock purchases ...................... (7) — (6) — (10) —
Stock award plans ............................ 7 — 6 — 5 —
Common stock issuances ....................... 3 — 3 — 4 —
Conversions of class A to class B common stock .... (21) — (30) — (28) —
Class A shares issued at end of year .............. 240 $ 3 258 $ 3 285 $ 3
Class B Common Stock
Balance at beginning of year .................... 735 $ 7 711 $ 7 684 $ 7
Common stock purchases ...................... (31) — (6) — (1) —
Conversions of class A to class B common stock .... 21 — 30 — 28 —
Class B shares issued at end of year .............. 725 $ 7 735 $ 7 711 $ 7
Additional Paid-In Capital
Balance at beginning of year .................... $ — $ 2 $ —
Stock award plans ............................ 388 398 381
Common stock purchases ...................... (475) (649) (569)
Common stock issuances ....................... 287 249 190
Option Premiums Paid ......................... (200) — —
Balance at end of year ......................... $ — $ — $ 2
Retained Earnings
Balance at beginning of year .................... $10,604 $ 9,335 $ 9,186
Net income attributable to controlling interests ..... 3,804 3,338 1,968
Dividends ($2.08, $1.88 and $1.80 per share) ....... (2,086) (1,909) (1,819)
Common stock purchases ...................... (2,194) (160) —
Balance at end of year ......................... $10,128 $10,604 $ 9,335
For the years ended December 31, 2011, 2010 and 2009, we repurchased a total of 38.7, 12.4 and
10.9 million shares of class A and class B common stock for $2.669 billion, $809 million and $569 million,
respectively. In January 2008, our Board of Directors authorized an increase in our share repurchase authority to
$10.0 billion. Unless terminated earlier by the resolution of our Board, the program will expire when we have
purchased all shares authorized for repurchase under the program. As of December 31, 2011, we had $2.525
billion of our share repurchase authorization remaining.
In order to lower the average cost of acquiring shares in our ongoing share repurchase program, we
periodically enter into structured repurchase agreements involving the use of capped call options for the purchase
of UPS class B shares. We pay a fixed sum of cash upon execution of each agreement in exchange for the right to
receive either a pre-determined amount of cash or stock. Upon expiration of each agreement, if the closing
market price of our common stock is above the pre-determined price, we will have our initial investment returned
with a premium in either cash or shares (at our election). If the closing market price of our common stock is at or
below the pre-determined price, we will receive the number of shares specified in the agreement. As of
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