Hurricane Rita Update

Service

September 28

• Union Pacific has cancelled the carload embargo for all stations affected by Hurricane Rita. We now have a route between Houston and Livonia and can serve all customers in the affected area.
• The only remaining embargo in the affected area is the Houston-area Englewood Intermodal ramp. We are issuing permits to access this facility. UP Embargo details.

 

September 27, 2005

• In the greater Houston area, employees have begun reporting to work, enabling the return to near-normal yard, local and through-train operations.

• Operations across most subdivisions are improving as electrical power returns or power generators are installed for signaling and grade crossing protection.
• The lines from Houston to Beaumont and on to Lake Charles and Kinder are expected to reopen late today or tomorrow.
• As of late Tuesday, UP had lifted embargoes on all stations between Dayton, Texas, to and including Brownsville, Texas. This includes all stations within the Houston terminal complex, with the exception of the Westfield auto facility and Englewood intermodal facility. The only locations that remain embargoed are on the Beaumont subdivision between Dayton and DeQuincy, La., and the Lafayette subdivision between Dayton and Lake Charles. We will revaluate the embargo tomorrow and adjust as necessary based on our progress and our customers' production capabilities.
• Of the total number of trains held due to weather since Saturday, more than half are moving again. Grain, rock, auto, intermodal and manifest traffic destined to the Texas Gulf are operating, with planned deliveries from today forward.

 

September 26, 2005

Union Pacific Corporation (NYSE: UNP) today announced that Hurricane Rita resulted in no catastrophic damage to the Railroad’s track structure, bridges or yards.

Hurricane Rita and the related widespread evacuations impacted roughly 2,500 miles of Union Pacific track, 17 operating subdivisions, five classification yards and the Houston terminal complex. As of noon today:

• all five classification yards are open and operational;
• five subdivisions are operational with commercial electric power;
• eight subdivisions are operating using electric generators;
• four subdivisions, with one of our two routes between Houston, Texas and Shreveport, Louisiana and our routes between Beaumont, Texas to Livonia and Lake Charles, Louisiana, remain out of service. We are clearing trees and placing generators along those routes with plans to restore service over the next couple of days.
• Customer embargoes remain in place for all inbound and outbound traffic moving west from Lake Charles to Houston, along with all traffic inbound and outbound for Union Pacific stations from Houston, Texas south to Brownsville, Texas along the Gulf Coast. These embargoes remain in effect because of the large number of shipments held en route during the evacuation and storm. The priority is to move those shipments to destination. Embargoes will be modified and cancelled as both Union Pacific and customer operations allow.

"The men and women of Union Pacific did a tremendous job preparing for the impact of Hurricane Rita," said Dick Davidson, chairman and chief executive officer of Union Pacific Corporation. "I am very pleased by the way the Railroad withstood the force of Mother Nature. We are still in the process of contacting our employees in the area to make sure they came through the storm safely. In the days and weeks ahead, our challenges will be to return our employees to work, return our Railroad to full operation and help our customers to keep the vital commerce of this nation on track."

Union Pacific and its customers ceased operations in the Beaumont, Houston and South Texas areas beginning on Thursday, September 22 as preparations were made for the landfall of Rita. Although limited train operations were initiated on Saturday, September 24, it is still uncertain how long it will be before our customers and the Railroad can resume full operations. Depending on the timing, our preliminary estimate is that third quarter 2005 Operating Income could be reduced by roughly $25 million. Lost or deferred revenue is the largest component of this projected reduction.

"Prior to Hurricane Rita, our third quarter financial performance had been trending near the high end of our earnings guidance of $0.88 to $0.98 per diluted share," said Jim Young, president and chief operating officer of Union Pacific Railroad. "While diesel fuel prices were a headwind, especially following Hurricane Katrina, revenue growth had also been strong. In fact, during the month of August we set several carloading and revenue records. While still very preliminary, we expect earnings per share to be within the original range, but likely at the mid to lower end.

"We are working closely with our customers to coordinate our start-up plans with the goal of lifting embargoes and resuming service as quickly and safely as possible. The ultimate impact on our third quarter performance will depend on when customers are able to reopen their facilities, as well as the timing of restoration of normal rail operations.

"We expect strong demand to continue in the months ahead with the potential to make up some of the revenue lost during the Hurricane Rita shut-down."

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 and serves the fastest-growing U.S. population centers. Union Pacific’s diversified business mix includes Agricultural Products, Automotive, Chemicals, Energy, Industrial Products and Intermodal. The railroad offers competitive long-haul 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.

 

September 25, 2005

• Union Pacific Railroad employees yesterday began to operate a limited number of mainline or thru freight trains to position the railroad for a return to limited operations next week as customer facilities come back on line.
• Rail yard and local train service will increase as subdivisions are returned to service and more employees report to work from hurricane evacuation points.
• Houston’s Mayor White asked today that essential service employees report back to work as soon as possible, including those in the transportation industries. Employees in the mandatory evacuation areas impacted by Hurricane Rita should contact the railroad at 877-877-2567 or report to their work location.
• Houston rail yards and infrastructure are intact. Sections of rail lines east and north out of Houston are being assessed, both on the ground and in the air, but appear to have mostly trees and powerlines down on the track. Currently, we are clearing the track and placing generators in service at those locations without electricity. 
• Track and operating employees also continue to assess rail yards and lines, both on the ground and in the air, between:
  
  • Beaumont, Texas to Livonia, La.
  • Houston to Shreveport, La.
  • Shreveport to Alexandria, La.
  • Alexandria to Lake Charles, La.
• Operating on a Union Pacific line, an Amtrak train was used to evacuate approximately 300 people Thursday afternoon, September 22, 2005, from the Amtrak Station in Houston to the Amtrak Station in San Antonio. Amtrak has been contacted about the possibility of returning evacuees to Houston from San Antonio. They are holding one set of equipment in San Antonio with the capacity for 300 passengers in the event this move is requested.

 

Next update will be available at 11 a.m. CDT Monday, September 26.

September 24, 2005

Resources and materials, including helicopters for aerial damage assessment, have been in position since Thursday north and west of Hurricane Rita's projected landfall path along the Texas/Louisiana Gulf coast.

Track and operating employees began assessing damage between Houston and Corpus Christi to Brownsville early Saturday morning. There appears to be minimal damage to this corridor and limited operations could begin by late Saturday.

Assessment teams are inspecting major rail yards in Houston. Electricity is out and that may affect the opening of the yards.   

Damage assessments will continue Saturday and Sunday, both on the ground and in the air as it is safe to do so, from Houston to Louisiana in the areas affected by Rita. 

Employees in the area impacted by Hurricane Rita should contact 877-877-2567 after the storm dissipates.

Next update will be available at 11 a.m. CDT Sunday, September 25.

September 23, 2005

Union Pacific Railroad employees living in areas where Hurricane Rita is predicted to make landfall are encouraged to follow all emergency instructions in their area.

After the storm passes, employees should call 1-877-877-2567 to let Union Pacific know they are safe. Callers will be asked to leave their names and contact information.

All South Texas yard operations were shutdown at noon Thursday, September 22. As a result, UP has issued embargoes on its primary routes into southern Texas, including Lake Charles through Houston to Brownsville. Main line operations in south Texas have been suspended until the storm passes.

Eleven train dispatching positions were moved from the Spring, Texas, Dispatching Center (SDC) to Omaha. The SDC controls the movement of trains over much of Texas and Louisiana. Spring is located just north of Houston.

Resources and materials have been staged north and west of the storm’s expected landfall including nearly 400 railcars of rock ballast, 450 portable electric generators and materials to rebuild track damaged as the result of the passing storm.

Employee information and service updates are on Union Pacific's Web site at www.up.com. Click on the hurricane icon located on the bottom right of the homepage.

September 22, 2005

All South Texas yard operations were shutdown at 11:59 a.m. Thursday, September 22. As a result, UP has issued embargoes on its primary routes into southern Texas, including Lake Charles through Houston to Brownsville. Main line operations in south Texas have been suspended until the storm passes.

Eleven dispatching positions were moved from the Spring, Texas, Dispatching Center (SDC) to Omaha. The SDC controls the movement of trains over much of Texas and Louisiana. Spring, Texas, is located just north of Houston.

September 21, 2005

In preparation for the expected arrival of Hurricane Rita later this week, Union Pacific will shutdown its South Texas yard operations by 11:59 a.m. Thursday, September 22.  As a result, UP has issued embargoes on our primary routes into Southern Texas, including Houston and Brownsville.  We also have been moving rail cars from our Texas coastal yards in Galveston, Freeport, Corpus Christi and Bloomington.

In addition, we are taking extra precautions to secure rail cars and other vehicles and property in our inland yards within the expected impact areas.

Union Pacific is working with other carriers on the re-routing of connecting traffic over their systems at other gateways.  With the floodgates being closed this morning in New Orleans, the four interchange trains with the Norfolk Southern are again being rerouted through the Memphis gateway.

Resources and materials are being staged north and west of the storm's expected landfall.

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Employee Information

September 22, 2005

Employees displaced from the area impacted by Hurricane Rita should contact 877-877-2567 after the storm passes to update Union Pacific with current/relocation contact information.

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Letter to Employees from President and Chief Operating Officer Jim Young

September 24, 2005

When natural disasters strike, I'm always amazed at how quickly and heroically our employees respond.

Fortunately, Union Pacific remained relatively intact after Hurricane Katrina, other than some minor flooding and downed power lines and trees across the tracks. But more than 200 of our employees in the New Orleans area were directly impacted by the storm – some losing everything – so their coworkers throughout the company are responding to help them with financial donations and additional assistance.

Because our railroad was in pretty good shape, our Operating people reached out to the harder-hit CSX and Norfolk Southern, working with them on traffic detours and engineering support, plus temporary office space, communication equipment and crew lodging in Avondale.

And now we're assessing the damage caused by Hurricane Rita. We took immediate action to safeguard and secure our facilities and equipment in harm's way by establishing a command center on Tuesday.

Since then, we've been in constant contact on the phone and in the field, coordinating one of the biggest shutdowns in our history. Employees have done an excellent job laying down trains, evacuating low-lying yards, and pre-positioning ballast, portable generators and materials to rebuild the railroad.

It was done quickly, so that employees and their families would have time to evacuate. Some are staying in the affected areas though, so they can immediately begin inspecting and restoring the railroad as the storm passes. In addition, several train dispatchers from the Spring, Texas, facility agreed to move with their families to Omaha for the next several days, so they can remotely dispatch trains in the Texas/Louisiana area from the Harriman Dispatching Center.

Special agents from around the system are standing by in the Gulf area to assist our Texas and Louisiana officers. The agents will escort train crews; work with local authorities and the National Guard to get our employees access to our property in areas closed to the public; protect the generators providing power to our track signals; and provide security for our automotive, chemical and intermodal business.

The personal sacrifices being made are just tremendous. I sincerely thank these employees and their families for everything they are doing.

The hardest-hit areas appear to be Lake Charles, La., where we have more than 100 employees, and Beaumont, Texas, where there are more than 200. Those who are displaced or are in the storm track should be sure to call 1-877-877-2567 as the hurricane dissipates to let UP know they are safe and to receive information updates.

Union Pacific is critical to our nation's economy, and serving our nation means restoring our Gulf Coast operations as quickly as possible. After the long wind-down this week, our customers will be anxious to once again begin production. The process of bringing in supplies and materials for the hurricane recovery effort also will begin. We'll need a quick return to work from our Engineering, Mechanical and Transportation employees to restore service to our customers and the country.

As employees return to their jobs, they'll be working under some challenging conditions. Safety must be priority No. 1, so please watch out for each other.

Again, thank you all for your efforts.

– Jim Young