Union Pacific 2011 Annual Report Download - page 38

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Share Repurchase Program – The shares repurchased in 2010 and the first quarter of 2011, shown in
the table below, were repurchased under our repurchase program that expired on March 31, 2011.
Effective April 1, 2011, our Board of Directors authorized the repurchase of 40 million shares of our
common stock by March 31, 2014, replacing our previous repurchase program. The shares repurchased
in the second, third, and fourth quarters of 2011, shown in the table below, were purchased under the
new program. As of December 31, 2011, we repurchased a total of $5.7 billion of our common stock
since the commencement of purchases under our repurchase programs.
Number of Shares Purchased
A
verage Price Paid
2011 2010 2011 2010
First quarter 2,636,178 - $ 94.10 $ -
Second quarter 3,576,399 6,496,400 100.75 71.74
Third quarter 4,681,535 7,643,400 91.45 73.19
Fourth quarter 3,885,658 2,500,596 98.16 89.39
Total 14,779,770 16,640,396 $ 95.94 $ 75.06
Remaining number of shares that may yet be repurchased 27,856,408
Management's assessments of market conditions and other pertinent facts guide the timing and volume
of all repurchases. We expect to fund any share repurchases under this program 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.
Shelf Registration Statement and Significant New Borrowings – Under our current shelf registration,
we may issue, from time to time, any combination of debt securities, preferred stock, common stock, or
warrants for debt securities or preferred stock in one or more offerings. We have no immediate plans to
issue equity securities; however, we will continue to explore opportunities to replace existing debt or
access capital through issuances of debt securities under our shelf registration, and, therefore, we may
issue additional debt securities at any time.
During 2011, we issued the following unsecured, fixed-rate debt securities under our current shelf
registration:
Date Description of Securities
August 9, 2011 $500 million of 4.75% Notes due September 15, 2041
The net proceeds from the offering were used for general corporate purposes, including the repurchase of
common stock pursuant to our share repurchase program. These debt securities include change-of-
control provisions. At December 31, 2011, we had remaining authority to issue up to $2.0 billion of debt
securities under our shelf registration.
During the third quarter of 2011, we renegotiated and extended for three years on substantially similar
terms a $100 million floating-rate term loan, which will mature on August 5, 2016.
Debt Exchange – On June 23, 2011, we exchanged $857 million of various outstanding notes and
debentures due between 2013 and 2019 (Existing Notes) for $750 million of 4.163% notes (New Notes)
due July 15, 2022, plus cash consideration of approximately $267 million and $17 million for accrued and
unpaid interest on the Existing Notes. The cash consideration was recorded as an adjustment to the
carrying value of debt, and the balance of the unamortized discount and issue costs from the Existing
Notes is being amortized as an adjustment of interest expense over the term of the New Notes. No gain
or loss was recognized as a result of the exchange. Costs related to the debt exchange that were
payable to parties other than the debt holders totaled approximately $6 million and were included in
interest expense during the year ended December 31, 2011.