UNION PACIFIC ANNOUNCES THIRD QUARTER RESULTS
FOR IMMEDIATE RELEASE:
OMAHA, October 19 -- Union Pacific Corporation today reported ongoing
strong earnings momentum. Income from continuing operations totaled $256 million
for third quarter 2000, or $1.00 per diluted share, up 17% compared to $218
million, or $.86 per diluted share, in third quarter 1999. Net income in third
quarter 1999 included an additional $27 million of income from discontinued
operations and totaled $245 million, or $.96 per diluted share.
Union Pacific Corporation, excluding Overnite, reported third quarter
operating income of $550 million, an 8 percent increase over the same period in
1999. The Railroad's commodity revenue increased 5 percent to a record $2.65
billion. The Automotive and Intermodal groups continued strong with each showing
double-digit revenue gains over third quarter 1999. Chemicals, Energy and
Industrial Products also grew, while Agricultural Products decreased slightly
for the third quarter 2000. The continuing revenue growth, coupled with
operating productivity improvements, drove a .4 percentage point reduction in
the operating ratio to 80.2 percent, a quarterly best for the merged company.
This improvement was accomplished despite a 64 percent increase in fuel prices
year over year, or 4.1 points of negative impact on the operating ratio.
<PAGE>
Overnite Transportation continued its improvement with third quarter
operating income of $20 million more than double the $8 million in the third
quarter of 1999. Revenue rose 4 percent to $287 million from $277 million in
1999. Overnite's operating ratio improved 3.9 percentage points to 93.2 percent
from 97.1 in 1999.
For the first nine months of 2000, the Corporation reported operating
income of $1.6 billion, a 19% increase over the $1.3 billion in 1999, and net
income from continuing operations of $685 million, a 27% improvement over the
$541 million for the same period in 1999.
"We're pleased to report another quarter of year-over-year improvement
in our financial results despite the challenge of higher fuel prices," said Dick
Davidson, Chairman and Chief Executive Officer. "This really demonstrates both
the strength of our franchise and the results of our quality focus."
Supplemental financial information is attached.
Media inquiries should be directed to John Bromley at Union Pacific
Railroad, (402) 271-3475.
This press release may contain statements about the Corporation's future
that are not statements of historical fact. These statements are
"forward-looking statements" for purposes of applicable securities laws, and are
based on current information and/or management's good faith belief as to future
events. Forward-looking statements include projections and estimates of
earnings, revenues, cost-savings, expenses, or other financial items; statements
of management's plans, strategies and objectives for future operation, and
management's expectations as to future performance and operations and the time
by which objectives will be achieved; statements concerning proposed new
products and services; and statements regarding future economic, industry or
market conditions or performance.
<PAGE>
Forward-looking statements are subject to risks and uncertainties.
Actual performance or results could differ materially from that anticipated by
the forward-looking statement. Important factors that could cause such
differences include the Corporation's success in implementing its financial and
operational initiatives; the impact of industry competition, conditions,
performance and consolidation; legislative and/or regulatory developments,
including initiatives to re-regulate the rail business; natural events such as
severe weather, floods and earthquakes; adverse general economic conditions,
both within the United States and globally; changes in fuel prices; changes in
labor costs; labor stoppages; and the outcome of claims and litigation.
Forward-looking statements speak only as of the date the statement was
made. The Corporation assumes no obligation to update forward-looking
information to reflect actual results, changes in assumptions or changes in
other factors affecting forward-looking information. If the Corporation does
update any forward-looking statement, no inference should be drawn that the
Corporation will make additional updates with respect to that statement or any
other forward-looking statements.
<PAGE>
<TABLE>
<CAPTION>
UNION PACIFIC CORPORATION
STATEMENT OF CONSOLIDATED INCOME
For the Three Months Ended September 30
(Dollars in Millions, Except Per Share Amounts)
(Unaudited)
2000 1999 Pct Chg
----------------------------------------
<S> <C> <C> <C>
Operating Revenue $ 3,070 $ 2,893 + 6
Operating Expense - a) 2,500 2,378 + 5
------- -------
Operating Income 570 515 + 11
Other Income - Net 17 24 - 29
Interest Expense (181) (184) - 2
------- -------
Income Before Income Taxes 406 355 + 14
Income Tax Expense (150) (137) + 9
------- -------
Income From Continuing Operations 256 218 + 17
Income From Discontinued Operations - b) - 27 U
------- -------
Net Income $ 256 $ 245 + 4
======= =======
Basic Earnings Per Share:
Income From Continuing Operations $ 1.04 $ 0.88 + 18
Diluted Earnings Per Share:
Income From Continuing Operations $ 1.00 $ 0.86 + 16
Income From Discontinued Operations - 0.10 U
------- -------
Net Income $ 1.00 $ 0.96 + 4
======= =======
Average Basic Shares Outstanding (MM) 246.5 246.6
Average Diluted Shares Outstanding (MM) 269.4 270.1
</TABLE>
a) Includes one-time merger expenses of $6 million pre-tax ($4 million after-tax
or $.01 per diluted share) in 2000, $20 million pre-tax ($13 million after-tax
or $.05 per diluted share) in 1999. Merger expenses include severance,
relocation and certain other costs related to Union Pacific employees affected
by the merger.
b) Represents an adjustment of a liability established in connection with the
discontinued operation of a former subsidiary.
<PAGE>
<TABLE>
<CAPTION>
UNION PACIFIC CORPORATION
STATEMENT OF CONSOLIDATED INCOME
For the Nine Months Ended September 30
(Dollars in Millions, Except Per Share Amounts)
(Unaudited)
2000 1999 Pct Chg
----------------------------------------
<S> <C> <C> <C>
Operating Revenue $ 8,962 $ 8,406 + 7
Operating Expense - a) 7,398 7,088 + 4
------- -------
Operating Income 1,564 1,318 + 19
Other Income - Net 61 73 - 16
Interest Expense (543) (554) - 2
------- -------
Income Before Income Taxes 1,082 837 + 29
Income Tax Expense (397) (296) + 34
------- -------
Income From Continuing Operations 685 541 + 27
Income From Discontinued Operations - b) - 27 U
------- -------
Net Income $ 685 $ 568 + 21
======= =======
Basic Earnings Per Share:
Income From Continuing Operations $ 2.78 $ 2.19 + 27
Diluted Earnings Per Share:
Income From Continuing Operations $ 2.71 $ 2.17 + 25
Income From Discontinued Operations - 0.10 U
------- -------
Net Income $ 2.71 $ 2.27 + 19
======= =======
Average Basic Shares Outstanding (MM) 246.4 246.5
Average Diluted Shares Outstanding (MM)269.4 269.6
</TABLE>
a) Includes one-time merger expenses of $24 million pre-tax ($15 million
after-tax or $.05 per diluted share) in 2000, $48 million pre-tax ($30 million
after-tax or $.11 per diluted share) in 1999. Merger expenses include severance,
relocation and certain other costs related to Union Pacific employees affected
by the merger.
b) Represents an adjustment of a liability established in connection with the
discontinued operation of a former subsidiary.
<PAGE>
<TABLE>
<CAPTION>
UNION PACIFIC RAILROAD
REVENUE DETAIL
Periods Ended September 30
(Unaudited)
Third Quarter Year-to-Date
2000 1999 Pct Chg 2000 1999 Pct Chg
----------------------------- ----------------------------
Commodity Revenue (000):
<S> <C> <C> <C> <C> <C> <C>
$ 363,350 $ 366,785 - 1 Agricultural $1,047,137 $1,042,178 -
279,915 238,932 + 17 Automotive 877,090 766,942 + 14
411,998 398,096 + 3 Chemicals 1,248,115 1,194,558 + 4
585,832 559,958 + 5 Energy 1,604,886 1,656,554 - 3
501,386 492,489 + 2 Industrial Products 1,518,682 1,416,170 + 7
506,319 459,334 + 10 Intermodal 1,418,218 1,272,866 + 11
----------- ---------- ---------- ----------
$2,648,800 $2,515,594 + 5 Total $7,714,128 $7,349,268 + 5
=========== ========== ========== ==========
Revenue Carloads:
217,236 232,670 - 7 Agricultural 651,474 670,100 - 3
196,494 167,044 + 18 Automotive 609,349 521,053 + 17
237,050 237,949 - Chemicals 712,457 695,531 + 2
513,337 477,826 + 7 Energy 1,432,383 1,402,990 + 2
362,625 364,711 - 1 Industrial Products 1,093,222 1,044,612 + 5
766,308 719,453 + 7 Intermodal 2,180,784 2,026,464 + 8
---------- ---------- ---------- ----------
2,293,050 2,199,653 + 4 Total 6,679,669 6,360,750 + 5
========== ========== ========== ==========
Average Revenue per Car:
$1,673 $1,576 + 6 Agricultural $1,607 $1,555 + 3
1,425 1,430 - Automotive 1,439 1,472 - 2
1,738 1,673 + 4 Chemicals 1,752 1,717 + 2
1,141 1,172 - 3 Energy 1,120 1,181 - 5
1,383 1,350 + 2 Industrial Products 1,389 1,356 + 2
661 638 + 4 Intermodal 650 628 + 4
---------- ----------- ---------- ---------
$1,155 $1,144 + 1 Total $1,155 $1,155 -
========== =========== ========== =========
</TABLE>
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<TABLE>
<CAPTION>
RAIL AND OTHER OPERATIONS - a)
REVIEW OF OPERATIONS
Periods Ended September 30
(Dollars in Millions, Except Operating Statistics)
(Unaudited)
Third Quarter Year-to-Date
2000 1999 Pct Chg 2000 1999 Pct Chg
---------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,783 $ 2,616 + 6 Operating Revenues $ 8,123 $ 7,603 + 7
Operating Expenses - b)
894 930 - 4 Salaries and Benefits 2,669 2,738 - 3
326 317 + 3 Rent Expense 927 933 - 1
273 259 + 5 Depreciation 814 774 + 5
326 199 + 64 Fuel and Utilities 913 568 + 61
136 136 - Materials and Supplies 423 403 + 5
278 268 + 4 Other 850 902 - 6
------- ------- ------- -------
2,233 2,109 + 6 Total 6,596 6,318 + 4
------- ------- ------- -------
$ 550 $ 507 + 8 Operating Income $ 1,527 $ 1,285 + 19
======= ======= ======= =======
Operating Statistics:
2,293 2,200 + 4 Revenue Carloads (Thousands) 6,680 6,361 + 5
126,071 120,348 + 5 Revenue Ton-Miles (Millions) 365,141 351,431 + 4
238,353 228,697 + 4 Gross Ton-Miles (Millions) 697,692 667,958 + 4
2.10(cent) 2.09(cent) - Rev/RTM (Commodity Revenue Based) 2.11(cent) 2.09(cent) + 1
$ 1,155 $ 1,144 + 1 Average Commodity Revenue Per Car $1,155 $ 1,155 -
51,134 52,728 - 3 Average Employees 50,951 52,890 - 4
92(cent) 56(cent) + 64 Average Fuel Price Per Gallon 86(cent) 54(cent) + 59
325 312 + 4 Fuel Consumed in Gallons (MM) 968 922 + 5
1.364 1.363 - Fuel Consumption Rate (Gal/000 GTM) 1.387 1.380 + 1
80.2 80.6 - 0.4 pt.Operating Ratio (%) 81.2 83.1 - 1.9 pt.
$ 6 $ 20 Merger Expenses ($MM) - b) $ 24 $ 48
</TABLE>
a) Excludes Overnite's operations.
b) Includes merger expenses (severance, relocation and certain other costs).
<PAGE>
<TABLE>
<CAPTION>
OVERNITE TRANSPORTATION COMPANY
REVIEW OF OPERATIONS
Periods Ended September 30
(Dollars in Millions, Except Operating Statistics)
(Unaudited)
Third Quarter Year-to-Date
2000 1999 Pct Chg 2000 1999 Pct Chg
------------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 287 $ 277 + 4 Operating Revenues $ 839 $ 803 + 4
Operating Expenses
164 169 - 3 Salaries and Benefits 494 494 -
26 24 + 8 Rent Expense 73 64 + 14
12 12 - Depreciation 36 35 + 3
18 13 + 38 Fuel and Utilities 53 35 + 51
12 13 - 8 Materials and Supplies 36 36 -
35 38 - 8 Other 110 106 + 4
----- ----- ----- -----
267 269 - 1 Total 802 770 + 4
----- ----- ----- -----
$ 20 $ 8 F Operating Income $ 37 $ 33 + 12
===== ===== ===== =====
Operating Statistics:
1,905 2,080 - 8 Millions of Pounds Hauled - LTL 5,689 6,112 - 7
2,038 2,197 - 7 Millions of Pounds Hauled - Combined 6,078 6,443 - 6
$ 13.86 $ 12.60 + 10 Revenue/CWT - LTL $ 13.60 $ 12.45 + 9
$ 13.45 $ 12.23 + 10 Revenue/CWT - Combined $ 13.18 $ 12.09 + 9
11,297 11,994 - 6 Average Employees 11,193 11,739 - 5
92(cent) 57(cent) + 61 Average Fuel Price Per Gallon 87(cent) 51(cent)+ 71
14,038 14,444 - 3 Fuel Consumed in Gallons (000s) 42,984 42,801 -
93.2 97.1 - 3.9 pt. Operating Ratio (%) 95.6 95.9 - 0.3 pt.
</TABLE>
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<TABLE>
<CAPTION>
UNION PACIFIC CORPORATION
STATEMENT OF CONSOLIDATED FINANCIAL POSITION
As of September 30, 2000 and December 31, 1999
(Dollars in Millions)
(Unaudited)
September 30, December 31,
2000 1999
--------------------------------------------
Assets:
<S> <C> <C>
Cash and Temporary Investments $ 55 $ 175
Other Current Assets 1,185 1,139
Investments 722 753
Properties - Net 28,145 27,519
Other Assets 284 302
-------- --------
Total $ 30,391 $ 29,888
======== ========
Liabilities and Stockholders' Equity:
Current Portion of Long Term Debt $ 210 $ 214
Other Current Liabilities 2,539 2,671
Long Term Debt 8,314 8,426
Deferred Income Taxes 7,082 6,715
Other Long Term Liabilities 2,194 2,361
Convertible Preferred Shares 1,500 1,500
Common Stockholders' Equity 8,552 8,001
-------- --------
Total $ 30,391 $ 29,888
======== ========
</TABLE>
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<TABLE>
<CAPTION>
UNION PACIFIC CORPORATION
STATEMENT OF CONSOLIDATED CASH FLOWS
For the Nine Months Ended September 30
(Dollars in Millions)
(Unaudited)
2000 1999
-----------------------------------
Cash From Operations:
<S> <C> <C>
Income From Continuing Operations $ 685 $ 541
Depreciation 850 809
Deferred Income Taxes 359 399
Other (461) (282)
------ ------
Cash Provided by Operations 1,433 1,467
------ ------
Investing Activities:
Capital Investments (1,403) (1,350)
Other 113 43
------ ------
Cash Used by Investing Activities (1,290) (1,307)
------ ------
Financing Activities:
Dividends Paid (150) (148)
Debt Repaid (651) (591)
Financings and Other - Net 538 601
------ ------
Cash Used by Financing Activities (263) (138)
------ ------
Net Change in Cash and Temporary Investments $ (120) $ 22
====== ======
</TABLE>
