Union Pacific Reports Fourth Quarter Earnings
Record 2009 Operating Ratio
Omaha, Neb., January 21, 2010 Union Pacific Corporation (NYSE: UNP) today reported 2009 fourth quarter net income of $551 million, or $1.08 per diluted share, compared to $661 million, or $1.31 per diluted share in the fourth quarter 2008.
"Union Pacific's fourth quarter earnings reflected the continued impact of the recession that began in 2008," said Jim Young, Union Pacific chairman and chief executive officer. "In this difficult environment, we've continued to focus on running our business efficiently and improving customer service. As a result, we finished the year with new records in safety, service, customer satisfaction and efficiency."
Fourth Quarter Summary
Slightly stronger fourth quarter demand led to an increase over soft prior year volume levels in three of Union Pacific's six business groups: Intermodal, Agricultural and Automotive. Fourth quarter 2009 operating revenues totaled $3.8 billion versus $4.3 billion in the fourth quarter 2008. In addition:
- Business volumes, as measured by total revenue carloads, were down 5 percent versus the fourth quarter 2008. Year-over-year freight revenues declined 13 percent to $3.5 billion in the fourth quarter 2009 as a result of lower volumes and a $320 million reduction in fuel surcharge revenue.
- Quarterly diesel fuel prices decreased 17 percent from an average of $2.46 per gallon in the fourth quarter 2008 to an average of $2.05 per gallon.
- Union Pacific's operating ratio improved to 73.3 percent from 73.4 percent in 2008, the fourth consecutive year of fourth quarter records, primarily due to ongoing efficiency initiatives and pricing gains that offset the impact of lower volumes.
- The Company's Customer Satisfaction Index of 88 improved 3 points and ties a quarterly best.
- Quarterly train speed, as reported to the Association of American Railroads, was 27.0 mph, up 1.9 mph or 8 percent versus the fourth quarter 2008. This improvement reflected continued productivity and operational improvements, as well as the impact of lower volumes.
Summary of Fourth Quarter Freight Revenues
- Automotive was down 1 percent.
- Intermodal was down 3 percent.
- Agricultural was down 7 percent.
- Chemicals was down 7 percent.
- Energy was down 22 percent.
- Industrial Products was down 28 percent.
2009 Full Year Summary
For the full year 2009, Union Pacific reported net income of $1.9 billion or $3.75 per diluted share. This compares to $2.3 billion or $4.54 per diluted share in 2008. The Company's 2009 operating revenue totaled $14.1 billion, compared to $18 billion in 2008. Operating income decreased 17 percent from 2008 to $3.4 billion.
- Business volumes were down 16 percent versus 2008.
- Freight revenues declined 22 percent to $13.4 billion in 2009 as a result of lower volumes and a $1.7 billion reduction in fuel surcharge revenue versus 2008.
- Average diesel fuel price per gallon decreased 44 percent from $3.15 to $1.75.
"Although still uncertain, the economic picture for 2010 looks somewhat more favorable than it did a year ago," Young said. "We will continue executing Union Pacific's long-term strategy to improve safety, customer service, productivity and efficiency. Our network management initiatives and strategic growth investments should position us to take full advantage of new business opportunities. The new safety and service records set in 2009 give customers increasing confidence that UP will serve their business needs in a safe, timely and efficient manner. As volumes return, these efforts provide us with opportunities to generate significant margin leverage and strong financial returns for our shareholders."
About Union Pacific
Union Pacific Corporation owns one of America's leading transportation companies. Its principal operating company, Union Pacific Railroad, links 23 states in the western two-thirds of the country. Union Pacific serves many of the fastest-growing U.S. population centers and provides Americans with a fuel-efficient, environmentally responsible and safe mode of freight transportation. Union Pacific's diversified business mix includes Agricultural Products, Automotive, Chemicals, Energy, Industrial Products and Intermodal. The railroad emphasizes excellent customer service and offers competitive routes from all major West Coast and Gulf Coast ports to eastern gateways. Union Pacific connects with Canada's rail systems and is the only railroad serving all six major gateways to Mexico, making it North America's premier rail franchise.
Investor contact is Jennifer Hamann, (402) 544-4227.
Media contact is Donna Kush, (402), 544-3753.
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