<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): January 21, 1999
Union Pacific Railroad Company
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-6146 94-6001323
(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
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 January 21, 1999 announcing Union Pacific Corporation's
financial results for the fourth quarter of 1998, which is
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99 Press Release dated January 21, 1999
announcing Union Pacific Corporation's
financial results for the fourth 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: January 21, 1999
UNION PACIFIC RAILROAD COMPANY
By: /s/ John J. Koraleski
---------------------
John J. Koraleski
Executive Vice President -
Finance and Chief Accounting
Officer
<PAGE> INDEX
EXHIBIT INDEX
Exhibit Description
99 Press Release dated January 21, 1999 announcing
Union Pacific Corporation's financial results for
the fourth quarter of 1998.
EXHIBIT 99
FOR IMMEDIATE RELEASE:
UNION PACIFIC ANNOUNCES FOURTH QUARTER RESULTS
DALLAS, TX, January 21 -- Union Pacific Corporation today
reported continued improvement in operating results at its Union
Pacific Railroad and Overnite Transportation Company subsidiaries.
These results, however, were offset by fourth quarter accounting
changes related to Overnite (discussed below). Excluding this net
after-tax charge of $285 million, net income would have totaled $96
million, or $.39 per diluted share. This includes $85 million for
the Railroad/Corporate Services and $11 million for Overnite, and
compares to a loss of $158 million and net income of $6 million
(before goodwill), respectively, in the fourth quarter of 1997.
Including these adjustments, the Corporation reported a net loss of
$189 million, or $.77 per diluted share, in the fourth quarter of
1998. This compares to a net loss of $152 million, or $.62 per
diluted share, in the fourth quarter of 1997.
In the second quarter of 1998, Union Pacific took a charge in
discontinued operations to reflect the anticipated proceeds from a
planned divestiture of Overnite. Because of softness in the market
for trucking stocks, the Company subsequently decided to postpone
the sale and has reclassified Overnite, in the fourth quarter, as
continuing operations. The Company also took a fourth quarter $547
million pre-tax and after-tax charge to continuing operations to
record the revaluation of Overnite goodwill. As a result of
reversing the $262 million after-tax loss on discontinued
operations and recording the $547 million goodwill charge, fourth
quarter earnings decreased $285 million.
Union Pacific Railroad showed continued improvement in service
levels and operating performance during the fourth quarter,
reporting operating income of $256 million, compared to an
operating loss of $72 million for the same period in 1997. Both
periods include Corporate Services. Commodity revenues were up 4
percent, with strength in coal, autos and agricultural products.
Despite the effect of flooding in Kansas City and Texas in late
October and November, the fourth quarter operating ratio decreased
nearly 14 percentage points to 89.4, reflecting improvements in key
operating indicators including train velocity, car inventory and
terminal dwell time.
Overnite Transportation completed another strong quarter,
reporting net income of $11 million (before accounting
adjustments), compared to net income of $6 million in 1997 (before
goodwill). Revenues increased 5 percent, reflecting industry-wide
rate increases as well as an ongoing focus on profitable freight
mix. With continued emphasis on quality service and cost
reduction, Overnite's fourth quarter operating ratio decreased 3.8
percentage points to 93.6, the lowest for any quarter since 1994.
For the total year 1998, Union Pacific Corporation reported a
net loss of $633 million, or $2.57 per share, as the Railroad
continued its efforts to restore service levels, and reflecting the
$547 million write-down of Overnite goodwill. This compares with
net income of $432 million, or $1.74 per diluted share, for 1997.
"We are encouraged by our fourth quarter operating results,
which were the best in the last 15 months," said Dick Davidson,
chief executive officer. "1999 will still be a transition year.
We have a great deal of work ahead of us, but our indicators are
headed in the right direction. There has been significant progress
made with our merger integration, and our customers are bringing
their business back. We are gaining momentum and I'm optimistic
about the future of our company."
A fourth quarter and full-year income statement is attached.
Media inquires 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
facts 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 Union Pacific Railroad is fully successful in recovering
from the effects of its congestion-related problems and
implementing its financial and operational initiatives; industry
competition and legislative and/or regulatory developments; natural
events such as severe weather, floods and earthquakes; the effects
of adverse general economic conditions; changes in fuel prices;
labor strikes; the impact of 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.)
UNION PACIFIC CORPORATION
STATEMENT OF CONSOLIDATED INCOME
For the Three Months Ended December 31
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
As Pro As
Reported Forma Reported Pct
1998 a) 1998 c) 1997 Chg
$ 2,684 Operating Revenue $ 2,684 $ 2,561 + 5
2,412 Operating Expense - b) 2,412 2,632 - 8
- ------- ------- -------
547 Goodwill Impairment - - -
(275) Operating Income (Loss) 272 (71) F
76 Other Income - Net 76 (22) F
188 Interest Expense 188 153 + 23
- ------- ------- -------
(387) Income (Loss) before Income Taxes 160 (246) F
(64) Income Tax (Expense) Benefit (64) 94 U
- ------- ------- -------
(451) Income (Loss) from Continuing Operations 96 (152) F
262 Income (Loss) from Discontinued Operations - - -
- ------- ------- -------
$ (189) Net Income (Loss) $ 96 $ (152) F
======= ======= =======
Diluted Earnings Per Share:
$ (1.83) Income (Loss) from Continuing Operations $ 0.39 $ (0.62) F
1.06 Income (Loss) from Discontinued Operations - - -
- ------- ------- -------
$ (0.77) Net Income (Loss) $ 0.39 $ (0.62) F
======= ======= =======
246.1 Average Basic Shares Outstanding (MM) 246.1 245.9
246.1 Average Diluted Shares Outstanding (MM) -d) 247.0 245.9
a) As Reported results for the 4th quarter include Overnite classified as
continuing operations.
b) Includes one-time merger expenses of $11 million pre-tax ($7 million
after-tax or $.03 per diluted shate) in 1998, $22 million pre-tax
($13 million after-tax or $.05 per share) in 1997. Merger expenses
include severance, relocation and certain other costs related to Union
Pacific employees affected by the merger. Also includes $5 million of
Overnite goodwill amortization in 1997.
c) Pro Forma results for 1998 exclude the one-time charge for the revaluation of
Overnite's goodwill of $547 million pre and after-tax and the $262 million
reversal of the loss from reclassifying Overnite from discontinued
operations to continuing operations.
d) 1998 As Reported excludes 22.7 million anti-dilutive common stock
equivalents, 1998 Pro Forma excludes 21.8 million anti-dilutive common
stock equivalents, and 1997 excludes 2.1 million anti-dilutive common
stock equivalents.
January 21, 1999
UNION PACIFIC CORPORATION
STATEMENT OF CONSOLIDATED INCOME
For the Year Ended December 31
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
As Pro As
Reported Forma Reported Pct
1998 a) 1998 c) 1997 Chg
$ 10,553 Operating Revenue $ 10,553 $ 11,079 - 5
10,177 Operating Expense - b) 10,177 9,935 + 2
547 Goodwill Impairment - - -
- -------- -------- --------
(171) Operating Income (Loss) 376 1,144 - 67
189 Other Income - Net 189 137 + 38
714 Interest Expense 714 605 + 18
- -------- -------- -------
(696) Income (Loss) before Income Taxes (149) 676 U
63 Income Tax (Expense) Benefit 63 (244) F
- -------- -------- --------
$ (633) Net Income (Loss) $ (86) $ 432 U
======== ======== ========
Diluted Earnings Per Share:
$ (2.57) Net Income (Loss) $ (0.35) $ 1.74 U
======== ======== ========
246.0 Average Basic Shares Outstanding (MM) 246.0 245.7
246.0 Average Diluted Shares Outstanding (MM) -d) 246.0 248.1
a) As Reported results for 1998 include Overnite results reclassified as
continuing operations for the full year.
b) Includes one-time merger expenses of $69 million pre-tax ($43 million
after-tax or $.17 per diluted share) in 1998, $97 million pre-tax ($60
million after-tax or $.24 per share) in 1997. Merger expenses include
severance, relocation and certain other costs related to Union Pacific
employees affected by the merger. Also includes $15 million and $20 million
of Overnite goodwill amortization in 1998 (As Reported and Pro Forma) and
1997, respectively.
c) Pro Forma results for 1998 exclude the one-time charge for the revaluation of
Overnite's goodwill of $547 million pre and after-tax.
d) Excludes anti-dilutive common stock equivalents in 1998.
January 21, 1999
