Union Pacific 2007 Annual Report Download - page 79

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75
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.
Income Taxes – As discussed in note 4, the IRS has completed its examinations and issued notices of
deficiency for tax years 1995 through 2004, and we are in different stages of the IRS appeals process for these
years. The IRS is examining our tax returns for tax years 2005 and 2006. In the third quarter of 2007, we
believe that we reached an agreement in principle with the IRS to resolve all of the issues, except interest,
related to tax years 1995 through 1998, including the previously reported dispute over certain donations of
property. We anticipate signing a closing agreement in 2008. At December 31, 2007, we have recorded a
current liability of $140 million for tax payments in 2008 related to federal and state income tax examinations.
We do not expect that the ultimate resolution of these examinations will have a material adverse effect on our
Consolidated Financial Statements.
11. Other Income
Other income included the following for the years ended December 31:
Millions of Dollars 2007 2006 2005
Rental income......................................................................................... $ 68 $ 83 $ 59
Net gain on non-operating asset dispositions ...................................... 52 72 135
Interest income....................................................................................... 50 29 17
Sale of receivables fees............................................................................ (35) (33) (23)
Non-operating environmental costs and other .................................... (19) (33) (43)
Total ........................................................................................................ $116 $118 $145
12. Share Repurchase Program
On January 30, 2007, our Board of Directors authorized the repurchase of up to 20 million shares of Union
Pacific Corporation common stock through the end of 2009. Management’s assessments of market conditions
and other pertinent facts guide the timing and volume of all repurchases. We expect to fund our common
stock repurchases through cash generated from operations, the sale or lease of various operating and non-
operating properties, debt issuances, and cash on hand at December 31, 2007.
During 2007, we repurchased approximately 13 million shares under this program at an aggregate purchase
price of approximately $1.5 billion. These shares were recorded in treasury stock at cost, which includes any
applicable commissions and fees.