Union Pacific 2009 Annual Report Download - page 92

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92
Indemnities – Our maximum potential exposure under indemnification arrangements, including certain
tax indemnifications, can range from a specified dollar amount to an unlimited amount, depending on the
nature of the transactions and the agreements. Due to uncertainty as to whether claims will be made or
how they will be resolved, we cannot reasonably determine the probability of an adverse claim or
reasonably estimate any adverse liability or the total maximum exposure under these indemnification
arrangements. We do not have any reason to believe that we will be required to make any material
payments under these indemnity provisions.
16. Share Repurchase Program
On January 30, 2007, our Board of Directors authorized the repurchase of up to 40 million shares of
Union Pacific Corporation common stock through the end of 2009. On May 1, 2008, our Board of
Directors authorized the repurchase of an additional 40 million common shares by March 31, 2011. As of
December 31, 2009, we have repurchased a total of $3 billion of Union Pacific Corporation common
stock since the original repurchase plan was authorized. Management’ s assessments of market conditions
and other pertinent facts guide the timing and volume of all repurchases. If we elect to make repurchases
of our common stock under this program in 2010, we expect to fund such repurchases through cash
generated from operations, the sale or lease of various operating and non-operating properties, debt
issuances, and cash on hand.
Number of Shares Purchased [a
]
Average Price Paid [a]
2009 2008 2009 2008
First quarter - 6,512,278 $- $ 61.83
Second quarter - 6,337,197 - 75.83
Third quarter - 5,943,111 - 74.85
Fourth quarter - 3,383,282 - 58.72
Total - 22,175,868 $- $ 68.84
Remaining number of shares that may yet be repurchased [a] 32,577,090
[a]
A
ll share numbers and prices have been restated to reflect the stock split completed on May 28, 2008 (see Note 3).
17. Accounting Pronouncements
In January 2010, the FASB issued Accounting Standards Update No. 2010-06, Improving Disclosures
about Fair Value Measurements. The Update provides amendments to FASB ASC 820-10 that require
entities to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair
value measurements and describe the reasons for the transfers. In addition the Update requires entities to
present separately information about purchases, sales, issuances, and settlements in the reconciliation for
fair value measurements using significant unobservable inputs (Level 3). The disclosures related to Level
1 and Level 2 fair value measurements are effective for us in 2010 and the disclosures related to Level 3
fair value measurements are effective for us in 2011. The Update requires new disclosures only, and will
have no impact on our consolidated financial position, results of operations, or cash flows.
In June 2009, the FASB issued Statement No. 166, Accounting for Transfers of Financial Assets—an
amendment of FASB Statement No. 140 (FAS 166). FAS 166 limits the circumstances in which
transferred financial assets can be derecognized and requires enhanced disclosures regarding transfers of
financial assets and a transferor’ s continuing involvement with transferred financial assets. In addition,
the concept of a qualifying special-purpose entity is no longer relevant for accounting purposes.
Therefore, formerly qualifying special-purpose entities (as defined under previous accounting standards)
should be evaluated for consolidation by reporting entities on and after the effective date in accordance