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 23, 2009 (April 23, 2009)

 

 

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)		(IRS 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

N/A

(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 23, 2009, Union Pacific Corporation issued a press release announcing its financial results for the quarter ended March 31, 2009. A copy of the press release is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

 

(c)

Exhibits.

 

99.1		Press Release of Union Pacific Corporation, dated April 23, 2009, announcing its financial results for the quarter ended March 31, 2009.

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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 23, 2009

 

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Exhibit Index

 

99.1		Press Release of Union Pacific Corporation, dated April 23, 2009

Exhibit 99.1

UNION PACIFIC REPORTS FIRST QUARTER EARNINGS

FOR IMMEDIATE RELEASE

First Quarter 2009 Highlights

 

•

Diluted earnings per share declined 15 percent to $0.72.

 

•

Average quarterly diesel fuel prices decreased 47 percent.

 

•

Operating income totaled $672 million, down 15 percent.

 

•

Productivity contributed to a record first quarter operating ratio of 80.3 percent.

 

•

Customer Satisfaction Index reached a quarterly best 87, up 6 points.

 

•

Strong service performance drove quarterly pricing gains.

Omaha, Neb., April 23, 2009 – Union Pacific Corporation (NYSE: UNP) today reported 2009 first quarter net income of $362 million, or $0.72 per diluted share, compared to $443 million, or $0.85 per diluted share for the first quarter 2008.

“Union Pacific produced solid quarterly results despite the challenging economy,” said Jim Young, Union Pacific chairman and chief executive officer. “We took decisive steps to reduce costs across our Company, while also making strong improvements in our safety performance, operating productivity and customer service.”

First Quarter Summary

The weak global economy affected all six of Union Pacific’s business groups. First quarter 2009 operating revenues totaled $3.4 billion versus $4.3 billion in the first quarter 2008. In addition:

 

•

Business volumes, as measured by total revenue carloads, were down 21 percent versus the first quarter 2008. This decline drove lower year-over-year freight revenues, down 20 percent to $3.2 billion in the first quarter 2009. Another reason for decreased freight revenues was a $306 million year-over-year reduction in first quarter 2009 fuel surcharge revenue.

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•

Operating expenses in the first quarter 2009 declined 21 percent versus year-ago levels. The Company’s cost saving initiatives associated with lower volumes and improved efficiency contributed to the decline. In addition, quarterly diesel fuel prices decreased 47 percent year-over-year to an average of $1.51 per gallon, lowering quarterly operating expenses.

 

•

Union Pacific’s operating ratio improved 1.2 points to 80.3 percent, a first quarter record.

 

•

The Customer Satisfaction Index improved by six points over the first quarter 2008 to a record 87.

 

•

Quarterly average train speed, as reported to the Association of American Railroads, was 27.2 mph, up 5 mph versus the first quarter 2008, a 23 percent increase, reflecting productivity and operational improvements as well as lower volumes.

Summary of First Quarter Freight Revenues

 

•

Energy was down 6 percent.

 

•

Agricultural was down 13 percent.

 

•

Chemicals was down 15 percent.

 

•

Intermodal was down 22 percent.

 

•

Industrial Products was down 29 percent.

 

•

Automotive was down 55 percent.

Outlook

“The difficult economic conditions continue to affect our business volumes,” Young said. “During this challenging time, we are reducing costs across the board, strengthening our operations and offering competitive supply chain solutions to our customers. We offer a safe, fuel-efficient, environmentally friendly transportation product that delivers value for our customers and the nation’s economy.”

-more-

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-3-

 

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.

Supplemental financial information is attached.

Additional information is available at our Web site: www.up.com

Contact for investors is Jennifer Hamann at (402) 544-4227

Contact for media is Donna Kush at (402) 544-3753

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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 expectations regarding the Corporation’s outlook regarding economic conditions and future business volumes, future operating performance, competitiveness of our service and, its ability to reduce costs. 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 2008, which was filed with the SEC on February 6, 2009. 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 Web site are provided for convenience and, therefore, information on or available through the Web site is not, and should not be deemed to be, incorporated by reference herein.

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UNION PACIFIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Millions, Except per Share Amounts and Percentages)

 

		1st Quarter
		2009				2008				%
						(unaudited)
For the Period Ending March 31,
Operating Revenues
Freight Revenues		$	3,240			$	4,059			(20	)
Other Revenues			175				211			(17	)
Total Operating Revenues			3,415				4,270			(20	)
Operating Expenses
Compensation and Benefits			1,070				1,132			(5	)
Purchased Services and Materials			399				469			(15	)
Fuel			386				957			(60	)
Depreciation			345				340			1
Equipment and Other Rents			317				342			(7	)
Other			226				242			(7	)
Total Operating Expenses			2,743				3,482			(21	)
Operating Income			672				788			(15	)
Other Income			23				25			(8	)
Interest Expense			(141	)			(126	)		12
Income Before Income Taxes			554				687			(19	)
Income Tax Expense			(192	)			(244	)		(21	)
Net Income		$	362			$	443			(18	)
Share and per Share
Earnings per Share - Basic		$	0.72			$	0.86			(16	)
Earnings per Share - Diluted		$	0.72			$	0.85			(15	)
Weighted Average Number of Shares - Basic			502.7				518.4			(3	)
Weighted Average Number of Shares - Diluted			504.6				522.8			(3	)
Dividends Declared per Share		$	0.27			$	0.22			23
Operating Ratio			80.3	%			81.5	%		(1.2	) pts
Effective Tax Rate			34.7	%			35.5	%		(0.8	) pts

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UNION PACIFIC CORPORATION

FREIGHT REVENUES STATISTICS

 

		1st Quarter
		2009			2008			%
					(unaudited)
For the Period Ending March 31,
Freight Revenues (Millions):
Agricultural		$	661		$	756		(13	)
Automotive			162			363		(55	)
Chemicals			513			603		(15	)
Energy			807			857		(6	)
Industrial Products			546			773		(29	)
Intermodal			551			707		(22	)
Total		$	3,240		$	4,059		(20	)
Revenue Carloads (Thousands):
Agricultural			212			240		(12	)
Automotive			97			188		(48	)
Chemicals			180			225		(20	)
Energy			521			582		(10	)
Industrial Products			222			304		(27	)
Intermodal			615			796		(23	)
Total			1,847			2,335		(21	)
Average Revenue per Car:
Agricultural		$	3,116		$	3,151		(1	)
Automotive			1,675			1,930		(13	)
Chemicals			2,843			2,676		6
Energy			1,550			1,473		5
Industrial Products			2,459			2,540		(3	)
Intermodal			897			889		1
Average		$	1,755		$	1,738		1

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UNION PACIFIC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Millions of Dollars, Except Percentages)

 

		Mar. 31, 2009				Dec. 31, 2008
		(unaudited)
Assets
Cash and Cash Equivalents		$	1,466			$	1,249
Other Current Assets			1,551				1,564
Investments			947				974
Net Properties			35,856				35,701
Other Assets			379				234
Total Assets		$	40,199			$	39,722
Liabilities and Shareholders’ Equity
Debt Due within One Year		$	137			$	320
Other Current Liabilities			2,545				2,560
Debt Due after One Year			9,058				8,607
Deferred Income Taxes			10,317				10,282
Other Long-Term Liabilities			2,488				2,506
Total Liabilities			24,545				24,275
Total Shareholders’ Equity			15,654				15,447
Total Liabilities and Shareholders’ Equity		$	40,199			$	39,722
Debt to Capital			37.0	%			36.6	%
Adjusted Debt to Capital *			47.9	%			47.4	%

 

*	Adjusted Debt to Capital is a non-GAAP measure; however, we believe that it is important in evaluating our financial performance. See Union Pacific Web site under Investor Relations for a reconciliation to GAAP.

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UNION PACIFIC CORPORATION

CONDENSED CONSOLIDATED CASH FLOWS

(Millions of Dollars)

 

		1st Quarter
		2009				2008
		(unaudited)
For the Period Ending March 31,
Operating Activities
Net Income		$	362			$	443
Depreciation			345				340
Deferred Income Taxes			20				36
Other - Net			(4	)			16
Cash Provided by Operating Activities			723				835
Investing Activities
Capital Investments			(526	)			(620	)
Other - Net			(107	)			(151	)
Cash Used in Investing Activities			(633	)			(771	)
Financing Activities
Debt Issued			843				842
Common Shares Repurchased			—				(455	)
Debt Repaid			(581	)			(416	)
Dividends Paid			(136	)			(115	)
Other - Net			1				29
Cash Used In Financing Activities			127				(115	)
Net Change in Cash and Cash Equivalents			217				(51	)
Cash and Cash Equivalents
Beginning of year			1,249				878
End of period		$	1,466			$	827
Free Cash Flow *
Cash Provided by Operating Activities		$	723			$	835
Cash Used in Investing Activities			(633	)			(771	)
Dividends Paid			(136	)			(115	)
Free Cash Flow		$	(46	)		$	(51	)

 

*	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 financing.

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UNION PACIFIC CORPORATION

OPERATING AND PERFORMANCE STATISTICS

 

		1st Quarter
		2009			2008			%
					(unaudited)
For the Period Ending March 31,
Operating / Performance Statistics
Gross Ton-Miles (GTMs) (Millions)			206,622			257,174		(20	)
Employees (Average)			44,997			49,073		(8	)
GTMs (Millions) per Employee			4.59			5.24		(12	)
Customer Satisfaction Index			87			81		6	pts
Locomotive Fuel Statistics
Average Fuel Price per Gallon Consumed		$	1.51		$	2.84		(47	)
Fuel Consumed in Gallons (Millions)			252			330		(24	)
Fuel Consumption Rate *			1.217			1.283		(5	)
AAR Reported Performance Measures
Average Train Speed (Miles per Hour)			27.2			22.2		23
Average Terminal Dwell Time (Hours)			24.3			25.2		(4	)
Average Rail Car Inventory			286,398			306,342		(7	)
Revenue Ton-Miles (Millions)
Agricultural			20,067			22,485		(11	)
Automotive			1,952			3,890		(50	)
Chemicals			11,999			13,939		(14	)
Energy			56,003			63,334		(12	)
Industrial Products			13,123			17,507		(25	)
Intermodal			15,276			19,552		(22	)
Total			118,420			140,707		(16	)

 

*	Fuel consumption is computed as follows: gallons of fuel consumed divided by gross ton-miles in thousands.