<PAGE> COVER
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 23, 1998
Union Pacific Railroad Company
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-6146 94-6001323
(State or Other Jurisdiction (Commission (I.R.S.
of Incorporation) File Number) Identification No.)
1416 Dodge Street, Omaha, Nebraska 68179
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (402) 271-5000
N/A
Former Name or Former Address, if Changed Since Last Report
<PAGE>1
Item 5. Other Events.
Attached as an Exhibit is the Press Release issued by
Union Pacific Corporation, the corporate parent of Union
Pacific Railroad Company, on July 23, 1998 announcing Union
Pacific Corporation's financial results for the second
quarter of 1998, which is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99 Press Release dated July 23, 1998
announcing Union Pacific Corporation's
financial results for the second
quarter of 1998.
<PAGE> 2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, Union Pacific Railroad Company has duly caused this
Report to be signed on its behalf by the undersigned
hereunto duly authorized.
Dated: July 23, 1998
UNION PACIFIC RAILROAD COMPANY
By: /s/ Richard J. Ressler
----------------------
Richard J. Ressler
Assistant General Counsel
<PAGE> EXHIBIT INDEX
EXHIBIT INDEX
Exhibit Description
99 Press Release dated July 23, 1998 announcing
Union Pacific Corporation's financial
results for the second quarter of 1998.
<PAGE> TEXT
EXHIBIT 99
FOR IMMEDIATE RELEASE
UNION PACIFIC ANNOUNCES SECOND QUARTER RESULTS
Dallas, TX, July 23, 1998 -- Union Pacific Corporation today
reported a loss from continuing operations of $158 million,
or $.64 per diluted share, in the second quarter. This
reflects the impact of a provision for customer claims. It
also reflects the impact of other service problems as well
as traffic slow-downs related to major track maintenance and
capacity expansion efforts in the Central Corridor during
the quarter. Costs included a $155 million after-tax
charge, or $.63 per diluted share, for the resolution of
customer claims. In the second quarter of 1997, income from
continuing operations was $215 million, or $.87 per share.
The Corporation reported a loss of $261 million from
discontinued operations in the quarter, reflecting the
intended sale of Overnite Transportation Company, for a
total net loss of $419 million in the quarter.
An 11 percent decline in revenues combined with a 15
percent increase in operating expenses to generate an
operating loss of $145 million in the quarter, and an
operating ratio of 106.1. Excluding the provision for
claims, the operating ratio would have been 95.6. For the
same period last year, operating income totaled $470
million, with an operating ratio of 82.2.
For the first half of 1998, the Corporation reported a
loss from continuing operations of $223 million and a net
loss of $481 million, or $.91 and $1.96 per diluted share
respectively. This compares with 1997 income from
continuing operations of $349 million and net income of $344
million, or $1.41 and $1.39 per diluted share, respectively.
"While financial and operating results were very
disappointing, we have made encouraging progress on several
fronts," said Dick Davidson, Chairman and Chief Executive
Officer. "Traffic in the Gulf Coast region is moving very
well, and the Central Corridor is improving as we complete
our maintenance program. We also achieved a major milestone
with the final cut-over of our computer operating system on
the West Coast. There's still work to be done, but we
expect to see continued improvement going forward as the
result of these efforts."
Second quarter and first half income statements are
attached.
Media inquiries should be directed to John Bromley at
Union Pacific Railroad, (402) 271-3475.
(This press release contains forward-looking statements
within the meaning of the Securities Act of 1933 and the
Securities Exchange Act of 1934. Such forward-looking
information is based on information available at this time
and is subject to risks and uncertainties that could cause
actual results to differ materially from those expressed in
the statements. Important factors that could cause such
differences include, but are not limited to, whether the
Railroad is fully successful in overcoming its
congestion-related problems and implementing its service recovery
plans, industry competition, regulatory developments,
natural events such as floods and earthquakes, the effects
of adverse general economic conditions, fuel prices, labor
strikes, the impact of the year 2000 systems problems and
the ultimate outcome of shipper claims related to
congestion, environmental investigations or proceedings and
other types of claims and litigations.)
<PAGE> SECOND QUARTER RESULTS
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED INCOME
For the Three Months Ended June 30
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
Second Quarter Pct
1998 1997 Chg
Operating Revenues . . . . . . . . . . . $2,362 $2,645 - 11
Operating Expenses b). . . . . . . . . . 2,507 2,175 + 15
Operating Income (Loss). . . . . . . . . (145)(a) 470 U
Other Income - Net. . . . . . . . . . . 53 19 F
Interest Expense. . . . . . . . . . . . 177 146 + 21
Income (Loss) Before Income Taxes. . . . (269) 343 U
Income Tax Benefit (Expense). . . . . . 111 (128) F
Income (Loss) From Continuing Operations ($158) $215 U
Discontinued Operations . . . . . . . . (261)(c) 1 U
Net Income (Loss). . . . . . . . . . . . ($419) $216 U
Diluted Earnings Per Share:
Income (Loss) From Continuing Operations $(0.64) $ 0.87 U
Discontinued Operations. . . . . . . . . $(1.06) $ - U
Net Income (Loss). . . . . . . . . . . . $(1.70) $ 0.87 U
Average Basic Shares Outstanding (MM). .. 246.0 245.7 -
Average Diluted Shares Outstanding (MM).. 269.4 248.0 -
a) Includes an estimated $700 million pre-tax ($434 million after-tax or $1.76
per share) impact of service difficulties.
b) Includes one-time merger expenses of $17 million pre-tax ($11 million
after-tax or $.04 per share) in 1998, $44 million pre-tax ($27 million
after-tax or $.11 per diluted share) in 1997. Merger expenses
include severance, relocation and certain other costs related to Union
Pacific employees affected by the merger.
c) Based upon net cash proceeds of $516 million for the sale of Overnite;
the mid-point of the filing range.
JULY 23, 1998
<PAGE> YEAR-TO-DATE RESULTS
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED INCOME
For the Six Months Ended June 30
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
Year-to-Date
Pct
1998 1997 Chg
Operating Revenues . . . . . . . . . . . $4,690 $5,241 - 11
Operating Expenses b). . . . . . . . . . 4,811 4,450 + 8
Operating Income (Loss). . . . . . . . . (121)(a) 791 U
Other Income - Net. . . . . . . . . . . 76 57 + 33
Interest Expense. . . . . . . . . . . . 337 295 + 14
Income (Loss) Before Income Taxes. . . . (382) 553 U
Income Tax Benefit (Expense). . . . . . 159 (204) F
Income (Loss) From Continuing Operations ($223) $349 U
Discontinued Operations . . . . . . . . (258)(c) (5) U
Net Income (Loss). . . . . . . . . . . . ($481) $344 U
Diluted Earnings Per Share:
Income (Loss) From Continuing Operations $(0.91) $ 1.41 U
Discontinued Operations. . . . . . . . . $(1.05) $ (0.02) U
Net Income (Loss). . . . . . . . . . . . $(1.96) $ 1.39 U
Average Basic Shares Outstanding (MM). . 246.0 245.6 -
Average Diluted Shares Outstanding (MM). 258.6 247.8 -
a) Includes an estimated $1,120 million pre-tax ($694 million after-tax
or $2.82 per share) impact of service difficulties.
b) Includes estimated one-time merger expenses of $46 million pre-tax
($29 million after-tax or $.12 per share) in 1998, $59 million pre-tax
($36 million after-tax or $.15 per diluted share) in 1997. Merger expenses
include severance, relocation and certain other costs related to Union
Pacific Employees affected by the merger.
c) Based upon net cash proceeds of $516 million for the sale of Overnite;
the mid-point of the filing range.
July 23, 1998
