EXHIBIT 99
UNION PACIFIC GENERATES EARNINGS GROWTH
FOR IMMEDIATE RELEASE:
Omaha, NE, October 18 - Union Pacific Corporation today reported net
income for the third quarter of $267 million, or $1.04 per diluted share. This
is an increase of 4 percent compared to net income of $256 million, or $1.00 per
diluted share, in the third quarter of 2000.
"The strength of Union Pacific's diverse franchise was evident in this
quarter's strong results," said Dick Davidson, chairman and chief executive
officer. "Revenues during the quarter came close to last year in spite of the
slowdown in the overall economy. Our financial results also demonstrate Union
Pacific's commitment to driving quality service, productivity improvement and
operational efficiency."
For the third quarter, Union Pacific Corporation, excluding Overnite,
reported operating income of $556 million compared to $550 million for the same
period in 2000. The Railroad's commodity revenue declined modestly to $2.63
billion for the quarter from $2.65 billion, as carloads were off 1 percent.
Energy revenue continued its record-setting performance with 4 percent growth
year-over-year, while Industrial Products rebounded during the third quarter
with a 3 percent gain. The other commodities all experienced revenue declines
during the quarter with Automotive down 10 percent, Chemicals down 5 percent,
Agricultural down 2 percent and Intermodal down 1 percent.
-MORE-
-2-
The operating ratio improved by 0.4 percentage points to the best
quarterly performance since 1996 at 79.7 percent from 80.1 percent in third
quarter 2000. Record levels of employee productivity and other cost control
measures, combined with moderating fuel prices were key contributors to the
improved performance.
"We're particularly encouraged by the continued record level of
customer satisfaction," said Davidson. "It shows that we're offering and
delivering services which meet our customers' needs."
Overnite Transportation reported third quarter operating income of
$18.3 million compared to $19.6 million in the third quarter of 2000. Operating
revenues increased 2 percent to $292 million from $287 million. Overnite's
operating ratio increased 0.5 percentage points to 93.7 percent.
For the first nine months of 2001, the Corporation reported operating
income of $1.5 billion and net income of $691 million compared to operating
income of $1.6 billion and net income of $685 million for the same period in
2000.
Union Pacific Corporation is 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. It 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
-MORE-
-3-
and eastern gateways, and as the only railroad to serve all six gateways to
Mexico, Union Pacific has the premier rail franchise in North America. The
Corporation also owns Overnite Transportation, a nationwide less-than-truckload
carrier, and Fenix, a group of affiliated technology companies.
Supplemental financial information is attached.
Additional information is available at our website: www.up.com. Our
contact for investors is Beth Whited at 402 271-4227. Our media contact is John
Bromley who can be reached at 402 271-3475.
**********
This press release and related materials may contain statements about
the Corporation's future that are not statements of historical fact. These
statements are "forward-looking statements" for purposes of applicable
securities laws, and are based on current information and/or management's good
faith belief as to future events. Forward-looking statements include, without
limitation, projections and estimates of earnings, revenues, cost-savings,
expenses, or other financial items; statements of management's plans, strategies
and objectives for future operation, and management's expectations as to future
performance and operations and the time by which objectives will be achieved;
statements concerning proposed new products and services; and statements
regarding future economic or market conditions or performance.
Forward-looking statements are subject to risks and uncertainties.
Actual performance or results could differ materially from that anticipated by
the forward-looking statement. Important factors that could cause such
differences include, but are not limited to, the Corporation's success in
implementing its financial and operational initiatives; the impact of industry
competition, conditions, performance and consolidation; legislative and/or
regulatory developments, including initiatives to re-regulate the rail business;
natural events such as severe weather, floods and earthquakes; adverse general
economic conditions, both within the United States and globally; changes in fuel
prices; changes in labor costs; labor stoppages; and the outcome of claims and
litigation.
Forward-looking statements speak only as of the date the statement was
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 any forward-looking statement, no inference should be drawn that the
Corporation will make additional updates with respect to that statement or any
other forward-looking statements.
UNION PACIFIC CORPORATION
STATEMENTS OF CONSOLIDATED INCOME
For the Three Months Ended September 30
(Dollars in Millions, Except Per Share Amounts)
(Unaudited)
<Table>
<Caption>
2001 2000 Pct Chg
--------- --------- ------------------
OPERATING REVENUES $ 3,026 $ 3,054 - 1
Operating Expenses 2,452 2,484 - 1
--------- ---------
OPERATING INCOME 574 570 + 1
Other Income - Net 31 17 + 82
Interest Expense (175) (181) - 3
--------- ---------
INCOME BEFORE INCOME TAXES 430 406 + 6
Income Tax Expense (163) (150) + 9
--------- ---------
NET INCOME $ 267 $ 256 + 4
========= =========
BASIC EARNINGS PER SHARE $ 1.08 $ 1.04 + 4
DILUTED EARNINGS PER SHARE $ 1.04 $ 1.00 + 4
Average Basic Shares Outstanding (MM) 247.9 246.5
Average Diluted Shares Outstanding (MM) 271.6 269.4
</Table>
October 18, 2001
(1)
UNION PACIFIC CORPORATION
STATEMENTS OF CONSOLIDATED INCOME
For the Nine Months Ended September 30
(Dollars in Millions, Except Per Share Amounts)
(Unaudited)
<Table>
<Caption>
2001 2000 Pct Chg
--------- --------- -------------------
OPERATING REVENUES $ 8,967 $ 8,926 -
Operating Expenses 7,460 7,362 + 1
--------- ---------
OPERATING INCOME 1,507 1,564 - 4
Other Income - Net 136 61 F
Interest Expense (534) (543) - 2
--------- ---------
INCOME BEFORE INCOME TAXES 1,109 1,082 + 2
Income Tax Expense (418) (397) + 5
--------- ---------
NET INCOME $ 691 $ 685 + 1
========= =========
BASIC EARNINGS PER SHARE $ 2.79 $ 2.78 -
DILUTED EARNINGS PER SHARE $ 2.71 $ 2.71 -
Average Basic Shares Outstanding (MM) 247.5 246.4
Average Diluted Shares Outstanding (MM) 271.5 269.4
</Table>
October 18, 2001
(2)
UNION PACIFIC RAILROAD
REVENUE DETAIL
Periods Ended September 30
(Unaudited)
<Table>
<Caption>
Third Quarter Year-to-Date
2001 2000 Pct Chg 2001 2000 Pct Chg
--------- --------- ------- ----------- ---------- -------
COMMODITY REVENUE (000):
$ 357,152 $ 363,350 - 2 Agricultural $ 1,071,408 $1,047,137 + 2
253,176 279,915 - 10 Automotive 829,852 877,090 - 5
392,646 411,998 - 5 Chemicals 1,170,451 1,248,115 - 6
611,022 585,832 + 4 Energy 1,781,240 1,604,886 + 11
514,279 501,386 + 3 Industrial Products 1,508,566 1,518,682 - 1
499,155 506,319 - 1 Intermodal 1,411,524 1,418,218 -
---------- ---------- ----------- ----------
$2,627,430 $2,648,800 - 1 Total $ 7,773,041 $7,714,128 + 1
========== ========== =========== ==========
REVENUE CARLOADS:
214,244 217,236 - 1 Agricultural 644,481 651,474 - 1
177,179 196,494 - 10 Automotive 561,454 609,349 - 8
225,040 237,050 - 5 Chemicals 666,090 712,457 - 7
549,092 513,337 + 7 Energy 1,602,117 1,432,383 + 12
367,614 362,625 + 1 Industrial Products 1,077,684 1,093,222 - 1
740,955 766,308 - 3 Intermodal 2,112,414 2,180,784 - 3
---------- ---------- ----------- ----------
2,274,124 2,293,050 - 1 Total 6,664,240 6,679,669 -
========== ========== =========== ==========
AVERAGE REVENUE PER CAR:
$ 1,667 $ 1,673 - Agricultural $ 1,662 $ 1,607 + 3
1,429 1,425 - Automotive 1,478 1,439 + 3
1,745 1,738 - Chemicals 1,757 1,752 -
1,113 1,141 - 2 Energy 1,112 1,120 - 1
1,399 1,383 + 1 Industrial Products 1,400 1,389 + 1
674 661 + 2 Intermodal 668 650 + 3
---------- ---------- ----------- ----------
$ 1,155 $ 1,155 - Total $ 1,166 $ 1,155 + 1
========== ========== =========== ==========
</Table>
October 18, 2001
(3)
RAIL AND OTHER OPERATIONS - a)
REVIEW OF OPERATIONS
Periods Ended September 30
(Dollars in Millions, Except Operating Statistics)
(Unaudited)
<Table>
<Caption>
Third Quarter Year-to-Date
2001 2000 Pct Chg 2001 2000 Pct Chg
--------- -------- -------- ------------ --------- --------
$ 2,734 $ 2,767 - 1 OPERATING REVENUES $ 8,105 $ 8,087 -
OPERATING EXPENSES
886 894 - 1 Salaries and Benefits 2,688 2,669 + 1
307 313 - 2 Rent Expense 921 891 + 3
280 273 + 3 Depreciation 841 814 + 3
301 326 - 8 Fuel and Utilities 956 913 + 5
121 136 - 11 Materials and Supplies 380 423 - 10
283 275 + 3 Other 855 850 + 1
--------- -------- ------------ ---------
2,178 2,217 - 2 Total 6,641 6,560 + 1
--------- -------- ------------ ---------
$ 556 $ 550 + 1 OPERATING INCOME $ 1,464 $ 1,527 - 4
========= ======== ============ =========
OPERATING STATISTICS:
2,274 2,293 - 1 Revenue Carloads (Thousands) 6,664 6,680 -
127,572 126,071 + 1 Revenue Ton-Miles (Millions) 375,318 365,141 + 3
243,383 238,353 + 2 Gross Ton-Miles (Millions) 711,036 697,692 + 2
2.06c. 2.10c. - 2 Rev/RTM (Commodity Revenue Based) 2.07c. 2.11c. - 2
$ 1,155 $ 1,155 - Average Commodity Revenue Per Car $ 1,166 $ 1,155 + 1
48,842 51,134 - 4 Average Employees 49,030 50,951 - 4
86c. 92c. - 7 Average Fuel Price Per Gallon 90c. 86c. + 5
319 325 - 2 Fuel Consumed in Gallons (MM) 958 968 - 1
1.311 1.364 - 4 Fuel Consumption Rate (Gal/000 GTM) 1.347 1.387 - 3
79.7 80.1 - 0.4 pt. Operating Ratio (%) 81.9 81.1 + 0.8 pt.
</Table>
a) Excludes Overnite's operations.
October 18, 2001
(4)
OVERNITE TRANSPORTATION COMPANY
REVIEW OF OPERATIONS
Periods Ended September 30
(Dollars in Millions, Except Operating Statistics)
(Unaudited)
<Table>
<Caption>
Third Quarter Year-to-Date
2001 2000 Pct Chg 2001 2000 Pct Chg
--------- --------- ---------- ---------- ---------- -------
$ 292 $ 287 + 2 OPERATING REVENUES $ 862 $ 839 + 3
OPERATING EXPENSES
173 164 + 5 Salaries and Benefits 519 494 + 5
25 26 - 4 Rent Expense 71 73 - 3
12 12 - Depreciation 36 36 -
17 18 - 6 Fuel and Utilities 52 53 - 2
12 12 - Materials and Supplies 37 36 + 3
35 35 - Other 104 110 - 5
--------- --------- ---------- ----------
274 267 + 3 Total 819 802 + 2
--------- --------- ---------- ----------
$ 18 $ 20 - 7 OPERATING INCOME * $ 43 $ 37 + 15
========= ========= ========== ==========
OPERATING STATISTICS:
1,898 1,905 - Millions of Pounds Hauled - LTL 5,656 5,689 - 1
2,015 2,038 - 1 Millions of Pounds Hauled - Combined 6,014 6,078 - 1
$ 14.37 $ 13.86 + 4 Revenue/CWT - LTL $ 14.14 $ 13.60 + 4
$ 13.99 $ 13.45 + 4 Revenue/CWT - Combined $ 13.75 $ 13.18 + 4
11,689 11,297 + 3 Average Employees 11,554 11,193 + 3
83c. 92c. - 10 Average Fuel Price Per Gallon 87c. 87c. - -
14,180 14,038 + 1 Fuel Consumed in Gallons (000s) 43,354 42,984 + 1
93.7 93.2 + 0.5 pt. Operating Ratio (%) 95.1 95.6 - 0.5 pt.
</Table>
* Percentage change is calculated based on unrounded amounts.
October 18, 2001
(5)
UNION PACIFIC CORPORATION
STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
As of September 30, 2001 and December 31, 2000
(Dollars in Millions)
<Table>
<Caption>
September 30, December 31,
2001 2000
------------ ------------
(Unaudited)
ASSETS:
Cash and Temporary Investments $ 120 $ 105
Other Current Assets 1,279 1,180
Investments 800 740
Properties - Net 28,679 28,196
Other Assets 427 278
------------ ------------
Total $ 31,305 $ 30,499
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Portion of Long Term Debt $ 197 $ 207
Other Current Liabilities 2,627 2,755
Long Term Debt 8,207 8,144
Deferred Income Taxes 7,517 7,143
Other Long Term Liabilities 2,000 2,088
Convertible Preferred Shares 1,500 1,500
Common Shareholders' Equity 9,257 8,662
------------ ------------
Total $ 31,305 $ 30,499
============ ============
</Table>
October 18, 2001
(6)
UNION PACIFIC CORPORATION
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Nine Months Ended September 30
(Dollars in Millions)
(Unaudited)
<Table>
<Caption>
2001 2000
------------ ------------
OPERATING ACTIVITIES:
Net Income $ 691 $ 685
Depreciation 877 850
Deferred Income Taxes 344 359
Other (550) (397)
------------ ------------
Cash Provided by Operating Activities 1,362 1,497
------------ ------------
INVESTING ACTIVITIES:
Capital Investments (1,354) (1,403)
Other 80 (49)
------------ ------------
Cash Used in Investing Activities (1,274) (1,354)
------------ ------------
FINANCING ACTIVITIES:
Dividends Paid (148) (150)
Debt Repaid (792) (651)
Financings and Other - Net 867 538
------------ ------------
Cash Used in Financing Activities (73) (263)
------------ ------------
NET CHANGE IN CASH AND TEMPORARY INVESTMENTS $ 15 $ (120)
============ ============
</Table>
October 18, 2001
(7)