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Union Pacific Reports Record Third Quarter

Achieves Best-Ever Earnings Per Share

Omaha, Neb., October 20, 2011 – Union Pacific Corporation (NYSE: UNP) today reported 2011 third quarter net income of $904 million, or $1.85 per diluted share, compared to $778 million, or $1.56 per diluted share, in the third quarter 2010.

All-Time Quarterly Records

  • Diluted earnings per share improved 19 percent to $1.85.
  • Operating revenues totaled $5.1 billion, up 16 percent.
  • Operating income totaled $1.6 billion, up 13 percent.

Union Pacific Corporation (NYSE: UNP) today reported 2011 third quarter net income of $904 million, or $1.85 per diluted share, compared to $778 million, or $1.56 per diluted share, in the third quarter 2010.

"Union Pacific delivered top and bottom line record results in the third quarter," said Jim Young, Union Pacific chairman and chief executive officer.  "We're clearly demonstrating how Union Pacific's diverse franchise and value-added service offerings are driving record free cash flow and improved financial returns for our shareholders."

Third Quarter Summary

Third quarter business volumes, as measured by total revenue carloads, grew one percent versus 2010. Four of Union Pacific's six business groups reported volume increases, including strong growth in automotive, industrial products, energy and chemical shipments. Agricultural products and intermodal volumes were down in the quarter compared to 2010. Quarterly operating revenue increased 16 percent in the third quarter 2011 to a record $5.1 billion versus $4.4 billion in the third quarter 2010. In addition:

  • Each of Union Pacific's six business groups reported freight revenue growth in the third quarter driven by increased fuel cost recoveries, core pricing gains and volume growth.
  • Average quarterly diesel fuel prices increased 42 percent from $2.24 per gallon in the third quarter 2010 to $3.18 per gallon in the third quarter 2011.
  • Union Pacific's operating ratio of 69.1 percent was 0.9 points higher than the best-ever quarterly record achieved in the third quarter 2010. The impact of higher fuel prices negatively impacted the operating ratio by 1.7 points compared to 2010.
  • Severe heat and extended drought conditions in Texas and the resulting damage to large sections of track structure negatively impacted operating efficiencies, driving operating expenses up by $18 million during the quarter.
  • The Customer Satisfaction Index of 91 set a new third quarter record, one point better than the third quarter 2010.
  • Quarterly train speed, as reported to the Association of American Railroads, was 24.6 mph, decreasing four percent compared to the third quarter 2010, mainly driven by weather-related challenges.
  • The Company repurchased 4.7 million shares in the third quarter 2011 at an average share price of $91.45 and an aggregate cost of $428 million.

Summary of Third Quarter Freight Revenues

  • Industrial Products up 24 percent
  • Automotive up 23 percent
  • Energy up 21 percent
  • Chemicals up 14 percent
  • Agricultural up 9 percent
  • Intermodal up 8 percent

Outlook

"While the economic outlook is uncertain, we're optimistic about the future for Union Pacific," said Young. "As we have shown in this weaker economy, the diversity of our business continues to deliver record results. We remain confident in the strength of our fundamental strategy to enhance our franchise, provide increased value for our customers, and generate improved 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 Michelle Gerhardt, (402) 544-4227.
Media contact is Donna Kush, (402) 544-3753.

Supplemental financial information is attached.

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This press release and related materials contain statements about the Corporation's future that are not statements of historical fact, including specifically the statements regarding the Corporation's expectations with respect to its ability to generate returns for shareholders; current and future   economic conditions; and its ability to enhance its franchise, provide value to its customers, and improve financial returns.  These statements are, or will be, forward-looking statements as defined by the Securities Act of 1933 and the Securities Exchange Act of 1934.  Forward-looking statements also generally include, without limitation, information or statements regarding:  projections, predictions, expectations, estimates or forecasts as to the Corporation's and its subsidiaries' business, financial, and operational results, and future economic performance;  and management's beliefs, expectations, goals, and objectives and other similar expressions concerning matters that are not historical facts.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times that, or by which, such performance or results will be achieved. Forward-looking information, including expectations regarding operational and financial improvements and the Corporation's future performance or results are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statement. Important factors, including risk factors, could affect the Corporation's and its subsidiaries' future results and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements. Information regarding risk factors and other cautionary information are available in the Corporation's Annual Report on Form 10-K for 2010, which was filed with the SEC on February 4, 2011.  The Corporation updates information regarding risk factors if circumstances require such updates in its periodic reports on Form 10-Q and its subsequent Annual Reports on Form 10-K (or such other reports that may be filed with the SEC).

Forward-looking statements speak only as of, and are based only upon information available on, the date the statements were 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 one or more forward-looking statements, no inference should be drawn that the Corporation will make additional updates with respect thereto or with respect to other forward-looking statements. References to our website are provided for convenience and, therefore, information on or available through the website is not, and should not be deemed to be, incorporated by reference herein.

The statements and information contained in the news releases provided by Union Pacific speak only as of the date issued. Such information by its nature may become outdated, and investors should not assume that the statements and information contained in Union Pacific's news releases remain current after the date issued. Union Pacific makes no commitment, and disclaims any duty, to update any of this information.