Union Pacific 2007 Annual Report Download - page 45

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Our asbestos-related liability activity was as follows:
Millions of Dollars 2007 2006 2005
Beginning balance................................................................................... $302 $311 $324
Accruals/(credits) ................................................................................... (20) - -
Payments................................................................................................. (17) (9) (13)
Ending balance at December 31............................................................. $265 $302 $311
Current portion, ending balance at December 31 ................................ $ 11 $ 13 $ 16
Approximately 13% of the recorded liability related to asserted claims and approximately 87% related to
unasserted claims. These claims are expected to be paid out over the next 27 years. In conjunction with the
liability update performed in 2007, we also reassessed estimated insurance recoveries. We have recognized an
asset for estimated insurance recoveries at December 31, 2007 and 2006. We will continue to review actual
experience and adjust our estimate as warranted.
Our asbestos-related claims activity was as follows:
2007 2006 2005
Open claims, beginning balance ............................................................ 2,277 2,435 2,316
New claims.............................................................................................. 269 316 741
Settled or dismissed claims .................................................................... (460) (474) (622)
Open claims, ending balance at December 31 ...................................... 2,086 2,277 2,435
We believe that our estimates of liability for asbestos-related claims and insurance recoveries are reasonable
and probable. The amounts recorded for asbestos-related liabilities and related insurance recoveries were
based on currently known facts. However, future events, such as the number of new claims to be filed each
year, average settlement costs, and insurance coverage issues could cause the actual costs and insurance
recoveries to be higher or lower than the projected amounts. Estimates also may vary in the future if:
strategies, activities, and outcomes of asbestos litigation materially change; federal and state laws governing
asbestos litigation increase or decrease the probability or amount of compensation of claimants; and there are
material changes with respect to payments made to claimants by other defendants.
Environmental – We are subject to federal, state, and local environmental laws and regulations. We identified
339 sites at which we are or may be liable for remediation costs associated with alleged contamination or for
violations of environmental requirements. This includes 41 sites that are the subject of actions taken by the
U.S. government, 22 of which are currently on the Superfund National Priorities List. Certain federal
legislation imposes joint and several liability for the remediation of identified sites; consequently, our ultimate
environmental liability may include costs relating to activities of other parties, in addition to costs relating to
our own activities at each site. Our environmental liability activity was as follows:
Millions of Dollars 2007 2006 2005
Beginning balance................................................................................... $210 $213 $201
Accruals................................................................................................... 41 39 45
Payments................................................................................................. (42) (42) (33)
Ending balance at December 31............................................................. $209 $210 $213
Current portion, ending balance at December 31 ................................ $ 63 $ 54 $ 46