Union Pacific 2010 Annual Report Download - page 82

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82
quality of volumetric data related to many of the sites, and the speculative nature of remediation costs.
Estimates of liability may vary over time due to changes in federal, state, and local laws governing
environmental remediation. Current obligations are not expected to have a material adverse effect on our
consolidated results of operations, financial condition, or liquidity.
Guarantees – At December 31, 2010, we were contingently liable for $382 million in guarantees. We
have recorded a liability of $3 million for the fair value of these obligations as of December 31, 2010 and
2009. We entered into these contingent guarantees in the normal course of business, and they include
guaranteed obligations related to our headquarters building, equipment financings, and affiliated
operations. The final guarantee expires in 2022. We are not aware of any existing event of default that
would require us to satisfy these guarantees. We do not expect that these guarantees will have a material
adverse effect on our consolidated financial condition, results of operations, or liquidity.
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.
18. Share Repurchase Program
On May 1, 2008, our Board of Directors authorized the repurchase of 40 million common shares by March
31, 2011. Management’s assessments of market conditions and other pertinent facts guide the timing and
volume of all repurchases. Any share repurchases under this program are expected to be funded through
cash generated from operations, the sale or lease of various operating and non-operating properties, debt
issuances, and cash on hand. Repurchased shares are recorded in treasury stock at cost, which
includes any applicable commissions and fees.
Number of Shares Purchase
d
A
verage Price Pai
d
2010 2009 2010 2009
First quarter - - $ - $-
Second quarter 6,496,400 - 71.74 -
Third quarter 7,643,400 - 73.19 -
Fourth quarter 2,500,596 - 89.39 -
Total 16,640,396 - $ 75.06 $-
Remaining number of shares that may yet be repurchased 15,936,694
Subsequent Event – On February 3, 2011, our Board of Directors authorized us to repurchase up to 40
million additional shares of our common stock under a new program effective from April 1, 2011 through
March 31, 2014.