Union Pacific 2009 Annual Report Download - page 89

Download and view the complete annual report

Please find page 89 of the 2009 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 114

  • 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
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

89
14. Leases
We lease certain locomotives, freight cars, and other property. The Consolidated Statement of Financial
Position as of December 31, 2009 and 2008 included $2,754 million, net of $927 million of accumulated
depreciation, and $2,024 million, net of $869 million of accumulated depreciation, respectively, for
properties held under capital leases. A charge to income resulting from the depreciation for assets held
under capital leases is included within depreciation expense in our Consolidated Statements of Income.
Future minimum lease payments for operating and capital leases with initial or remaining non-cancelable
lease terms in excess of one year as of December 31, 2009 were as follows:
M
illions of Dollars
Operatin
g
L
eases Capita
l
L
eases
2010 $ 576 $ 290
2011 570 292
2012 488 247
2013 425 256
2014 352 267
Later years 2,901 1,623
Total minimum lease payments $ 5,312 $ 2,975
Amount representing interest N/A (914)
Present value of minimum lease payments N/A $ 2,061
The majority of capital lease payments relate to locomotives. Rent expense for operating leases with
terms exceeding one month was $686 million in 2009, $747 million in 2008, and $810 million in 2007.
When cash rental payments are not made on a straight-line basis, we recognize variable rental expense on
a straight-line basis over the lease term. Contingent rentals and sub-rentals are not significant.
15. Commitments and Contingencies
Asserted and Unasserted Claims – Various claims and lawsuits are pending against us and certain of
our subsidiaries. We cannot fully determine the effect of all asserted and unasserted claims on our
consolidated results of operations, financial condition, or liquidity; however, to the extent possible, where
asserted and unasserted claims are considered probable and where such claims can be reasonably
estimated, we have recorded a liability. We do not expect that any known lawsuits, claims, environmental
costs, commitments, contingent liabilities, or guarantees will have a material adverse effect on our
consolidated results of operations, financial condition, or liquidity after taking into account liabilities and
insurance recoveries previously recorded for these matters.
Personal Injury – The cost of personal injuries to employees and others related to our activities is
charged to expense based on estimates of the ultimate cost and number of incidents each year. We use
third-party actuaries to assist us in measuring the expense and liability, including unasserted claims. The
Federal Employers’ Liability Act (FELA) governs compensation for work-related accidents. Under
FELA, damages are assessed based on a finding of fault through litigation or out-of-court settlements. We
offer a comprehensive variety of services and rehabilitation programs for employees who are injured at
work.