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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): January 22, 1998
UNION PACIFIC CORPORATION
(Exact name of registrant as specified in its charter)
UTAH 1-13916 13-2647483
(State or Other (Commission File (IRS Employer
Jurisdiction Number) Identification Number)
of Incorporation)
1717 Main Street, Suite 5900, Dallas, Texas
(Address of principal executive offices)
75201
(Zip Code)
(214) 743-5637
(Registrant's telephone number, including area code)
None
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
Attached as an Exhibit is the Press Release issued by Union
Pacific Corporation on January 22, 1998 that announces the fourth quarter
earnings of the Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Union Pacific Corporation
(Registrant)
Date: January 22, 1998 By: /s/ RICHARD J. RESSLER
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(Signature)
Name: Richard J. Ressler
Title: Assistant General Counsel
EXHIBIT INDEX
Exhibit Description Page
99.1 Press Release dated January 22, 1998 announcing the
Company's fourth quarter earnings.
FOR IMMEDIATE RELEASE
UNION PACIFIC ANNOUNCES FOURTH QUARTER RESULTS
Dallas, Texas, January 22, 1998--Union Pacific Corporation today reported a
net loss of $152 million, or $.62 per share, in the fourth quarter of 1997,
reflecting the impact of severe congestion at its railroad subsidiary
during the quarter, as well as the costs of its Service Recovery Plan. In
total, the Corporation estimates that these congestion problems reduced net
income by approximately $353 million, or $1.42 per share.
Results for the quarter included a $40 million, or $.16 per
share, after-tax loss on the planned sale of the company's logistics
subsidiary, Skyway Freight Systems. It also included $13 million, or $.05
per share, in one-time, after-tax expenses associated with the
implementation of the UP/SP merger. Net income was $229 million, or $.93
per share, in the fourth quarter of 1996.
Union Pacific Railroad recorded an operating loss of $57 million
in the fourth quarter of 1997, compared to operating income of $470 million
for the same period in 1996. During the quarter, the Railroad focused
intense efforts on alleviating congestion on its system and restoring
normal service levels to its customers. As a result of the service
difficulties and the costs associated with the recovery plan, Railroad
revenues were down 11 percent in the quarter, while operating costs
increased 12 percent. This led to an operating ratio of 102.5, compared
with 81.6 in the fourth quarter of 1996.
Overnite Transportation completed another strong quarter,
reporting net income of $6 million, compared to a net loss of $1 million in
1996 (before goodwill of $5 million in both quarters). Continued
improvement in service levels combined with a strong trucking environment
to increase revenues by 14 percent. The company also
continued its focus on productivity improvement during the quarter. As a
result, Overnite's operating ratio decreased by 5.9 percentage points to
97.4.
Union Pacific Corporation reported net income of $432 million, or
$1.74 per share, for the full year 1997. This compares with pro forma 1996
income of $664 million, or $2.71 per share, and reported 1996 income from
continuing operations of $733 million, or $3.36 per share.
"We are extremely disappointed with our fourth quarter operating
and financial performance," said Dick Davidson, chief executive officer.
"We have let down our customers, our shareholders, and, not least of all,
our employees. We are focused intensively on our Service Recovery Plan and
have been encouraged by the improvement in our service indicators. While
our earnings in the first quarter will not match last year, as we go
through the year our performance should improve. As we complete the
recovery and move forward with our merger implementation, all of us are
working hard to regain the confidence of our customers, our shareholders,
and our employees."
A fourth quarter and full-year income statement is 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. This 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 above. Important facts that could
cause such differences include, but are not limited to, whether Union
Pacific Railroad's Service Recovery Plan achieves its goals; industry
competition and regulatory developments; natural events such as severe
weather, floods and earthquakes; the effects of adverse economic conditions
affecting the Company's
shippers; changes in fuel prices; and the ultimate outcome of shipper
claims, environmental investigations or proceedings and other types of
claims and litigations.)
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED INCOME
For the Three Months Ended December 31
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
Fourth Quarter
1997 1996 Pct Chg
---------- ---------- --------
Operating Revenues ......................... $ 2,561 $ 2,810 -9
Operating Expenses ......................... 2,619a) 2,350 +11
------- ---
Operating Income ........................... (58)b) 460 U
Other Income-Net ........................... (22) 80 U
Interest Expense ........................... (153) (155) -1
Corporate Expenses ......................... (13) (26) -50
------- ---
Income Before Income Taxes ................. (246) 359 U
Income Taxes ............................... 94 (130) F
------- ---
Net Income ................................. (152) 229 U
------- ---
Basic Earnings Per Share ................... ($ 0.62) $ 0.94 U
------- ---
Diluted Earnings Per Share ................. ($0.62)c) $ 0.93 U
------- ---
Basic Average Shares Outstanding (MM) ...... 245.9 244.5 +1
Diluted Average Shares Outstanding (MM) .... 248.0 246.4 +1
a) One-time merger expenses: $22 million pre-tax ($13 million after-tax or
$.05 per diluted share). Merger expenses include severance, relocation and
certain other costs related to Union Pacific employees affected by the
merger.
b) Includes $567 million pre-tax ($353 million after tax or $1.42 per
diluted share) impact of rail congestion.
c) Accounting regulations do not allow inclusion of common stock
equivalents in a loss period since they are anti-dilutive.
January 22, 1998
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED INCOME
For the Year Ended December 31
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
Year-to-Date
Pro Forma Pct Reported
1997 1996 a) Chg 1996 Pct Chg
-------- ---------- --- -------- -------
Operating Revenues ............. $ 11,079 $ 11,219 -1 $ 8,786 +26
Operating Expenses ............. 9,826b) 9,613 +2 7,253 +35
--- ------- ---
Operating Income ............... 1,253 c) 1,606 -22 1,533 -18
Other Income-Net ............... 137 128 +7 182 -25
Interest Expense ............... (605) (616) -2 (501) +21
Corporate Expenses ............. (109) (101) +8 (101) +8
--- ------- ---
Income Before Income Taxes ..... 676 1,017 -34 1,113 -39
Income Taxes ................... (244) (353) -31 (380) -36
--- ------- ---
Income From Continuing
Operations ..................... 432 664 -35 733 -41
Discontinued Operations ........ - - 171 U
--- ------- ---
Net Income ..................... $ 432 $ 664 -35 $ 904 -52
--- ------- ---
Basic Earnings Per Share ....... $ 1.76 $ 2.73 -36 $ 4.17 -58
--- ------- ---
Diluted Earnings Per Share ..... $ 1.74 $ 2.71 -36 $ 4.14 -58
----- ----- --- ------- ---
Basic Average Shares Outstanding
(MM) ........................... 245.7 243.5 +1 216.7 +13
Diluted Average Shares
Outstanding (MM) ............... 248.1 244.9 +1 218.1 +14
a) Pro Forma results for 1996 reflect the Corporation's September 1996
acquisition of Southern Pacific Rail Corporation (SP) and spin-off of Union
Pacific Resources Group Inc. (UPRG) as if both transactions had been
completed January 1, 1996.
b) One-time merger expenses: $97 million pre-tax ($60 million after-tax or
$.24 per diluted share) Merger expenses include severance, relocation and
certain other costs related to Union Pacific employees affected by the
merger.
c) Includes $730 million pre-tax ($455 million after tax or $1.83 per
diluted share) impact of rail congestion.
January 22, 1998