UNITED STATES

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) :  April 21, 2005

 

 

Union Pacific Corporation

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Utah		1-6075		13-2626465
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)
1400 Douglas Street, Omaha, Nebraska				68179
(Address of Principal Executive Offices)				(Zip Code)

 

 

 

Registrant’s telephone number, including area code: (402) 544-5000

 

 

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the

filing obligation of the registrant under any of the following provisions (see General Instruction

A.2. below):

¨		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02 Results of Operations and Financial Condition

 

 

On April 21, 2005, Union Pacific Corporation issued a press release announcing its

financial results for the first quarter of 2005. A copy of the press release is furnished herewith

as Exhibit 99.1 to this Current Report.

 

 

Item 9.01 Financial Statements and Exhibits

 

 

(c)

Exhibits

 

 

Exhibit 99.1		Press Release, April 21, 2005, announcing Union Pacific Corporation’s financial results for the first quarter of 2005.

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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.

 

 

Dated: April 21, 2005

 

 

 

Exhibit 99.1

 

UNION PACIFIC REPORTS FIRST QUARTER RESULTS

 

 

 

 

 

FOR IMMEDIATE RELEASE:

 

OMAHA, Neb., April 21, 2005 – Union Pacific Corporation (NYSE: UNP) today

 

reported earnings of $.48 per diluted share, or net income of $128 million in the first quarter of

 

2005 compared to earnings of $.63 per diluted share, or net income of $165 million for the first

 

quarter of 2004.

 

“Operationally, our performance has improved since the beginning of the year, but our

 

earnings were impacted by the network challenges we continue to face as well as the West Coast

 

storm. We estimate that the storm adversely affected net income by approximately $34 million,”

 

said Dick Davidson, chairman and chief executive officer. “The bright spot continues to be the

 

strong demand, particularly in our Energy and Industrial Products markets. Operating revenue

 

grew by nine percent to $3.2 billion – a first quarter record and the fourth consecutive quarter

 

that we’ve topped the $3 billion mark.”

 

 

First Quarter Overview

 

·		Union Pacific Corporation reported record operating revenue of $3.2 billion in the first   quarter of 2005 compared to last year’s $2.9 billion. Operating income in the first quarter of   2005 was $313 million compared to $314 million for the same period in 2004.

 

 

 

 

 

 

 

 

 

 

-m o r e-

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-2-

 

·		Commodity revenue was a first quarter record of $3.0 billion, up 8 percent, compared to $2.8   billion in 2004. Drivers of the increase were a 1 percent increase in volumes as well as   higher fuel surcharge recoveries and improved yields.
·		First quarter 2005 average revenue per car was at an all-time best of $1,306 per car, versus   $1,214 in the first quarter of 2004.
·		The operating margin decreased to 9.9 percent in the first quarter of 2005 from 10.9 percent   in 2004, primarily due to the impact of the January storm and higher fuel prices.
·		The Railroad’s average quarterly fuel price of $1.45 per gallon compares to $1.02 per gallon   paid a year ago.
·		Although impacted by the January storm, quarterly average system speed, as reported to the   Association of American Railroads, averaged 21.1 mph, 0.8 mph slower than the first quarter   of 2004, but 0.6 mph higher than the prior quarter.

 

 

2005 First Quarter Commodity Revenue Summary versus 2004

 

·		Energy up 14 percent
·		Industrial Products up 12 percent
·		Agriculture up 9 percent
·		Chemicals up 8 percent
·		Intermodal up 3 percent
·		Automotive down 1 percent

 

“Energy and Industrial Products posted best-ever revenue performances this quarter,”

 

Davidson said. “We see solid demand continuing, with the primary exception being Automotive,

 

which has been affected by softer auto production.”

 

-m o r e-

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-3-

 

Looking Forward

 

“Improvements in our operating metrics are encouraging. Although we’ll face daily

 

challenges, we believe our network management initiatives are gaining traction and we will work

 

to build on that momentum,” Davidson said. “Demand for our services remains strong and our

 

task is to leverage that strength into better bottom-line results. As we continue to restore fluidity

 

to our network, our customers, our employees and our shareholders will benefit.”

 

Union Pacific Corporation owns one of America’s leading transportation companies. Its

 

principal operating company, Union Pacific Railroad, is the largest railroad in North America,

 

covering 23 states across the western two-thirds of the United States. A strong focus on quality

 

and a strategically advantageous route structure enable the company to serve customers in

 

critical and fast growing markets. The Railroad is a leading carrier of low-sulfur coal used in

 

electrical power generation and has broad coverage of the large chemical-producing areas along

 

the Gulf Coast. With competitive long-haul routes between all major West Coast ports and

 

eastern gateways and as the only railroad serving all six gateways to Mexico, Union Pacific has

 

the premier rail franchise in North America.

 

Supplemental financial information is attached.

 

Additional information regarding Union Pacific is available on our Web site:

 

www.up.com. Our contact for investors is Jennifer Hamann at (402) 544-4227. Our media

 

contact is Kathryn Blackwell (402) 544-3753.

 

-m o r e-

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-4-

 

**********

 

This press release and related materials may contain statements about the Corporation’s future that are

not statements of historical fact. 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 include, without

limitation, statements regarding: expectations as to continued or increasing demand for rail transportation in

excess of supply; expectations regarding operational improvements, including the effectiveness of network

management initiatives that have been or will be implemented to improve system velocity, customer service and

shareholder returns; expectations as to increased returns, cost savings, revenue growth and earnings; expectations

regarding fuel price; the time by which certain objectives will be achieved, including expected improvements in

velocity and implementation of network management initiatives; estimates of costs relating to environmental

remediation and restoration; proposed new products and services; expectations that claims, lawsuits, environmental

costs, commitments, contingent liabilities, labor negotiations or agreements, or other matters will not have a

material adverse effect on our consolidated financial position, results of operations or liquidity; and statements

concerning projections, predictions, expectations, estimates or forecasts as to the Corporation’s and its

subsidiaries’ business, financial and operational results, and future economic performance; and statements of

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 as to operational, service and network fluidity improvements

are subject to risks and uncertainties that could cause actual performance or results to differ materially from those

expressed in the statements.

 

Important factors that 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 include, but are not limited to: whether the Corporation and its subsidiaries are fully successful in

implementing their financial and operational initiatives, including those plans and management initiatives to

improve system velocity and network performance or otherwise improve operations; industry competition,

conditions, performance and consolidation; general legislative and regulatory developments, including possible

enactment of initiatives to re-regulate the rail business; legislative, regulatory and legal developments involving

taxation, including enactment of new federal or state income tax rates, revisions of controlling authority and the

outcome of tax claims and litigation; changes in securities and capital markets; natural events such as severe

weather, fire, floods and earthquakes; the effects of adverse general economic conditions, both within the United

States and globally; any adverse economic or operational repercussions from terrorist activities and any

governmental response thereto; war or risk of war; changes in fuel prices; changes in labor costs; labor

stoppages; and the outcome of claims and litigation, including those related to environmental contamination,

personal injuries, and occupational illnesses arising from hearing loss, repetitive motion and exposure to

asbestos and diesel fumes.

 

Forward-looking statements speak only as of 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 the website is not, and should not be construed to be, incorporated by reference herein.

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UNION PACIFIC CORPORATION

 

STATEMENTS OF CONSOLIDATED INCOME

 

For the Three Months Ended March 31

 

(Dollars in Millions, Except Per Share Amounts)

 

(Unaudited)

 

 

 

			2005				2004			Pct Chg
Operating Revenues		$	3,152			$	2,893			9
Operating Expenses
Salaries and Benefits			1,099				1,011			9
Equipment and Other Rents			353				327			8
Depreciation			289				274			5
Fuel and Utilities			539				389			39
Materials and Supplies			135				123			10
Purchased Services and Other			424				455			(7	)
Total Operating Expenses			2,839				2,579			10
Operating Income			313				314			-
Other Income - Net			20				28			(29	)
Interest Expense			(132	)			(135	)		(2	)
Income Before Income Taxes			201				207			(3	)
Income Tax Expense			(73	)			(42	)		74
Net Income		$	128			$	165			(22	)
Basic Earnings Per Share		$	0.49			$	0.64			(23	)
Diluted Earnings Per Share		$	0.48			$	0.63			(24	)

 

 

 

 

 

 

 

 

 

 

 

April 21, 2005		(1)

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UNION PACIFIC RAILROAD

 

REVENUE DETAIL

 

For the Three Months Ended March 31

 

(Unaudited)

 

 

 

			2005			2004		Pct Chg
Commodity Revenue (000):
Agricultural		$	447,902		$	411,250		+		9
Automotive			293,105			296,801		–		1
Chemicals			441,019			410,108		+		8
Energy			667,783			586,464		+		14
Industrial Products			630,196			562,716		+		12
Intermodal			523,927			510,065		+		3
Total		$	3,003,932		$	2,777,404		+		8
Revenue Carloads:
Agricultural			215,755			230,644		–		6
Automotive			192,317			203,210		–		5
Chemicals			227,742			223,759		+		2
Energy			573,987			541,143		+		6
Industrial Products			358,560			364,474		–		2
Intermodal			731,843			724,851		+		1
Total			2,300,204			2,288,081		+		1
Average Revenue per Car:
Agricultural		$	2,076		$	1,783		+		16
Automotive			1,524			1,461		+		4
Chemicals			1,936			1,833		+		6
Energy			1,163			1,084		+		7
Industrial Products			1,758			1,544		+		14
Intermodal			716			704		+		2
Total		$	1,306		$	1,214		+		8

 

 

 

 

 

 

 

 

 

 

April 21, 2005		(2)

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UNION PACIFIC CORPORATION

 

STATEMENTS OF CONSOLIDATED FINANCIAL POSITION

 

As of March 31, 2005 and December 31, 2004

 

(Dollars in Millions)

 

(Unaudited)

 

 

 

		March 31, 2005			December 31, 2004
Assets:
Cash and Temporary Investments		$	732		$	977
Other Current Assets			1,634			1,313
Investments			777			767
Properties - Net			31,230			31,014
Other Assets			641			518
Total		$	35,014		$	34,589
Liabilities and Shareholders’ Equity:
Current Portion of Long Term Debt		$	145		$	150
Other Current Liabilities			2,405			2,366
Long Term Debt			7,919			7,981
Deferred Income Taxes			9,461			9,180
Other Long Term Liabilities			2,276			2,257
Common Shareholders’ Equity			12,808			12,655
Total		$	35,014		$	34,589

 

 

 

 

 

 

 

 

 

 

 

 

 

 

April 21, 2005		(3)

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UNION PACIFIC CORPORATION

 

STATEMENTS OF CONSOLIDATED CASH FLOWS

 

For the Three Months Ended March 31

 

(Dollars in Millions)

 

(Unaudited)

 

 

			2005				2004
Operating Activities:
Net Income		$	128			$	165
Depreciation			289				274
Deferred Income Taxes			36				109
Other			(2	)			(226	)
Cash Provided by Operating Activities			451				322
Investing Activities:
Capital Investments			(476	)			(389	)
Other			(144	)			(84	)
Cash Used in Investing Activities			(620	)			(473	)
Financing Activities:
Dividends Paid			(78	)			(77	)
Debt Repaid			(54	)			(55	)
Financings and Other - Net			56				31
Cash Used in Financing Activities			(76	)			(101	)
Net Change in Cash and Temporary Investments		$	(245	)		$	(252	)
Non-Cash Capital Lease Financings		$	-			$	-

 

 

 

 

 

 

 

 

 

 

April 21, 2005		(4)

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APPENDIX

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UNION PACIFIC CORPORATION

 

OPERATING AND FINANCIAL STATISTICS

 

For the Three Months Ended March 31

 

(Unaudited)

 

 

 

							2005				2004			Pct Chg
Operating Statistics:
		Revenue Carloads (Thousands)					2,300				2,288			1
		Revenue Ton-Miles (Billions)					137.5				134.6			2
		Gross Ton-Miles (GTMs) (Billions)					258.4				251.9			3
		Operating Margin					9.9	%			10.9	%		(1.0	)pt
		Operating Ratio					90.1	%			89.1	%		1.0	pt
		Average Employees					49,096				46,838			5
		GTMs (Millions) per Average Employee					5.26				5.38			(2	)
		Average Fuel Price Per Gallon				$	1.45			$	1.02			42
		Fuel Consumed in Gallons (Millions)					344				348			(1	)
		Fuel Consumption Rate (Gal per 000 GTM)					1.33				1.38			(4	)
AAR Reported Performance Measures:
		Average Train Speed (Miles per Hour)					21.1				21.9			(4	)
		Average Terminal Dwell Time (Hours)					29.5				29.8			(1	)
Financial:
		Average Basic Shares Outstanding (Millions)					261.4				258.7			1
		Average Diluted Shares Outstanding (Millions)					264.3				262.5			1
		Effective Tax Rate					36.3	%			20.3	%		16.0	pt
		Debt to Capital (a)					38.6	%			39.1	%		(0.5	)pt
		Lease Adjusted Debt to Capital (b)					44.5	%			45.1	%		(0.6	)pt
		Free Cash Flow (After Dividends) (Millions) (c)				$	(247	)		$	(228	)		(8	)

 

(a)	Debt to capital is computed as follows: total debt divided by total debt plus equity. 2004 percentages are as of December 31, 2004.

 

(b)	Lease adjusted debt to capital is computed as follows: total debt plus net present value of operating leases divided by total debt plus equity plus net present value of operating leases. 2004 percentages are as of December 31, 2004.

 

(c)

Free cash flow is a non-GAAP measure; however, we believe that it is important in evaluating our financial performance and measures our ability to generate cash without incurring additional external financings. The following table reconciles cash provided by operating activities (GAAP measure) to free cash flow:

 

		Year-to-Date
			2005				2004
Cash Provided by Operating Activities		$	451			$	322
Cash Used in Investing Activities			(620	)			(473	)
Dividends Paid			(78	)			(77	)
Non-Cash Capital Lease Financings			-				-
Free Cash Flow		$	(247	)		$	(228	)

 

 

 

 

 

 

 

 

 

 

April 21, 2005		(A-1)