EXHIBIT 99
RECORD QUARTER FOR UNION PACIFIC
FOURTH STRAIGHT QUARTER OF DOUBLE-DIGIT EPS GROWTH
FOR IMMEDIATE RELEASE:
OMAHA, NE, OCTOBER 24 - Union Pacific Corporation (NYSE:UNP) today
reported an all-time record net income for the third quarter of $437 million, or
$1.63 per diluted share. This is compared to net income of $267 million, or
$1.04 per diluted share, in the third quarter of 2001. Third quarter results
included income gains from a transaction with the Utah Transit Authority, as
well as a tax settlement. Excluding these items, quarterly earnings were $1.19
per diluted share - a 14 percent increase over third quarter 2001.
"Union Pacific combined record revenues with all-time productivity
levels to produce great results," said Dick Davidson, chairman and chief
executive officer. "We achieved double-digit growth in earnings per share for
the fourth straight quarter. This trend is further proof that our business
strategy is on target."
THIRD QUARTER HIGHLIGHTS
For the third quarter, Union Pacific Corporation, excluding Overnite,
reported record operating income of $619 million compared to $556 million for
the same period in 2001.
o All-time quarterly records were:
o Operating Revenue - $2.85 billion
o Commodity Revenue - $2.73 billion
-more-
-2-
o Operating Margin (operating income/operating revenue) - 21.7
percent
o Operating Ratio (operating expense/operating revenue) - 78.3
percent
o Employee Productivity (gross ton-miles in millions/average
employees) - 5.29
o Total Revenue Carloads - 2.36 million
THIRD QUARTER RAILROAD COMMODITY REVENUE SUMMARY VERSUS 2001
o Overall, commodity revenue was up 4 percent. The following commodity
groups had revenue growth ranging from 13 percent to 2 percent:
o Automotive up 13 percent
o Intermodal up 9 percent
o Agricultural up 4 percent
o Industrial Products up 4 percent
o Chemicals up 2 percent
Energy was the only commodity group that was down, at 3
percent.
"We have been facing some challenges in the wake of the port
disruption," said Davidson. "Fortunately, our strong rail franchise gives us the
revenue diversity and network flexibility to rebound rapidly. We remain focused
on reducing costs and improving service as we work to meet Union Pacific's
commitment to our customers and shareholders."
OVERNITE CORPORATION
Overnite Corporation reported a 19 percent increase in third quarter
operating income of $25.6 million, compared to $21.5 million in 2001 on a pro
forma basis. (Pro forma results for 2001 include $3.2 million of operating
income from Motor Cargo,
-more-
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which was acquired on November 30, 2001.) Operating revenues increased 7 percent
to $349.6 million from $327.8 million last year. Overnite's 2002 operating ratio
improved 0.7 percentage points to 92.7 percent from 93.4 percent in 2001.
"Overnite made an impressive contribution to the quarter with its best
overall quarterly performance since 1994," Davidson said.
YEAR-TO-DATE OPERATING INCOME UP 16 PERCENT
For the first nine months of 2002, Union Pacific Corporation reported a
16 percent increase in operating income to $1.7 billion compared with $1.5
billion in 2001. Net income rose 39 percent to $963 million, versus $691 million
for the same period a year ago.
In addition, the year-to-date operating ratio for Union Pacific
Corporation, excluding Overnite, decreased over two percentage points to 79.7
percent from 81.9 percent in 2001 (operating margin improved to 20.3 percent
from 18.1 percent over the same period).
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
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major West Coast ports 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's trucking operations include Overnite
Corporation, which owns its less-than-truckload carriers Overnite Transportation
and Motor Cargo.
Supplemental financial information is attached.
Additional information is available at our website: www.up.com. Our
media contact is Kathryn Blackwell who can be reached at 402 271-3753. Our
contact for investors is Jennifer Hamann at 402 271-4227.
**********
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; any adverse economic or
operational repercussions from terrorist activities and any government response
thereto; 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>
2002 a) 2001 Pct Chg
------- -------- ---------
OPERATING REVENUES $ 3,199 $ 3,026 +6
Operating Expenses 2,555 2,452 +4
------- -------
OPERATING INCOME 644 574 +12
Other Income - Net 161 31 F
Interest Expense (157) (175) -10
------- -------
INCOME BEFORE INCOME TAXES 648 430 +51
Income Tax Expense (211) (163) +29
------- -------
NET INCOME $ 437 $ 267 +64
======= =======
BASIC EARNINGS PER SHARE $ 1.73 $ 1.08 +60
DILUTED EARNINGS PER SHARE $ 1.63 $ 1.04 +57
Average Basic Shares Outstanding (MM) 252.5 247.9
Average Diluted Shares Outstanding (MM) 277.3 271.6
</Table>
a) Includes the results of Motor Cargo, acquired November 30, 2001. Motor
Cargo contributed revenues of $38.1 million, operating expense of $34.7
million and operating income of $3.4 million during the third quarter of
2002.
October 24, 2002 (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>
2002 a) 2001 Pct Chg
------- ------ ---------
OPERATING REVENUES $ 9,320 $8,967 +4
Operating Expenses 7,575 7,460 +2
------- ------
OPERATING INCOME 1,745 1,507 +16
Other Income - Net 217 136 +60
Interest Expense (479) (534) -10
------- ------
INCOME BEFORE INCOME TAXES 1,483 1,109 +34
Income Tax Expense (520) (418) +24
------- ------
NET INCOME $ 963 $ 691 +39
======= ======
BASIC EARNINGS PER SHARE $ 3.83 $ 2.79 +37
DILUTED EARNINGS PER SHARE $ 3.64 $ 2.71 +34
Average Basic Shares Outstanding (MM) 251.8 247.5
Average Diluted Shares Outstanding (MM) 276.5 271.5
</Table>
a) Includes the results of Motor Cargo, acquired November 30, 2001. Motor
Cargo contributed revenues of $104.8 million, operating expense of $97.4
million and operating income of $7.4 million during the first nine months
of 2002.
October 24, 2002 (2)
UNION PACIFIC RAILROAD
REVENUE DETAIL
Periods Ended September 30
(Unaudited)
<Table>
<Caption>
Third Quarter Year-to-Date
2002 2001 Pct Chg 2002 2001 Pct Chg
- ---------- ---------- ------- ---------- ---------- -------
COMMODITY REVENUE (000):
$ 373,160 $ 357,774 +4 Agricultural $1,095,825 $1,073,157 +2
284,942 253,176 +13 Automotive 892,982 829,852 +8
398,778 392,024 +2 Chemicals 1,186,297 1,168,702 +2
591,381 611,022 -3 Energy 1,743,068 1,781,240 -2
535,602 514,279 +4 Industrial Products 1,542,588 1,508,566 +2
542,115 499,155 +9 Intermodal 1,511,693 1,411,524 +7
- ---------- ---------- ---------- ----------
$2,725,978 $2,627,430 +4 Total $7,972,453 $7,773,041 +3
========== ========== ========== ==========
REVENUE CARLOADS:
215,974 214,507 +1 Agricultural 646,630 645,226 -
192,640 177,179 +9 Automotive 604,930 561,454 +8
230,674 224,777 +3 Chemicals 680,943 665,345 +2
539,915 549,092 -2 Energy 1,604,997 1,602,117 -
378,475 367,614 +3 Industrial Products 1,072,511 1,077,684 -
801,251 740,955 +8 Intermodal 2,253,392 2,112,414 +7
- ---------- ---------- ---------- ----------
2,358,929 2,274,124 +4 Total 6,863,403 6,664,240 +3
========== ========== ========== ==========
AVERAGE REVENUE PER CAR:
$ 1,728 $ 1,668 +4 Agricultural $ 1,695 $ 1,663 +2
1,479 1,429 +3 Automotive 1,476 1,478 -
1,729 1,744 -1 Chemicals 1,742 1,757 -1
1,095 1,113 -2 Energy 1,086 1,112 -2
1,415 1,399 +1 Industrial Products 1,438 1,400 +3
677 674 - Intermodal 671 668 -
- ---------- ---------- ---------- ----------
$ 1,156 $ 1,155 - Total $ 1,162 $ 1,166 -
========== ========== ========== ==========
</Table>
October 24, 2002 (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
2002 2001 Pct Chg 2002 2001 Pct Chg
- ------- -------- ------- ------- ------- -------
$ 2,850 $ 2,734 +4 OPERATING REVENUES $ 8,334 $ 8,105 +3
OPERATING EXPENSES
919 886 +4 Salaries and Benefits 2,745 2,688 +2
316 307 +3 Rent Expense 939 921 +2
288 280 +3 Depreciation 858 841 +2
277 301 -8 Fuel and Utilities 770 956 -19
119 121 -2 Materials and Supplies 365 380 -4
312 283 +10 Purchased Services and Other 966 855 +13
- ------- ------- ------- -------
2,231 2,178 +2 Total 6,643 6,641 -
- ------- ------- ------- -------
$ 619 $ 556 +11 OPERATING INCOME $ 1,691 $ 1,464 +16
======= ======= ======= =======
OPERATING STATISTICS:
2,359 2,274 +4 Revenue Carloads (Thousands) 6,863 6,664 +3
131.5 127.6 +3 Revenue Ton-Miles (Billions) 387.5 375.3 +3
253.3 243.4 +4 Gross Ton-Miles (Billions) 741.3 711.0 +4
2.07c. 2.06c. - Rev/RTM (Commodity Revenue Based) 2.06c. 2.07c. -
$ 1,156 $ 1,155 - Average Commodity Revenue Per Car $ 1,162 $ 1,166 -
47,906 48,842 -2 Average Employees 47,639 49,031 -3
75c. 86c. 13 Average Fuel Price Per Gallon 70c. 90c. -22
331 319 +4 Fuel Consumed in Gallons (MM) 985 958 +3
1.31 1.31 - Fuel Consumption Rate (Gal/000 GTM) 1.33 1.35 -1
21.7 20.3 +1.4 pt. Operating Margin (%) 20.3 18.1 +2.2 pt.
78.3 79.7 -1.4 pt. Operating Ratio (%) 79.7 81.9 -2.2 pt.
</Table>
a) Excludes Overnite's operations.
October 24, 2002 (4)
OVERNITE CORPORATION
REVIEW OF OPERATIONS - PRO FORMA
Periods Ended September 30
(Dollars in Millions, Except Operating Statistics)
(Unaudited)
<Table>
<Caption>
Third Quarter Year-to-Date
2002 2001 a) Pct Chg 2002 2001 a) Pct Chg
- ------- -------- ------- ------- ------- -------
$ 349.6 $ 327.8 +7 OPERATING REVENUES $ 986.2 $ 964.9 +2
OPERATING EXPENSES
206.2 191.3 +8 Salaries and Benefits 603.7 572.2 +6
33.2 28.9 +15 Rent Expense 89.9 81.5 +10
14.5 13.7 +6 Depreciation 43.8 41.7 +5
17.6 19.0 -7 Fuel and Utilities 49.1 59.6 -18
13.9 13.7 +1 Materials and Supplies 39.4 41.6 -5
38.6 39.7 -3 Other 105.9 118.4 -11
- ------- ------- ------- -------
324.0 306.3 +6 Total 931.8 915.0 +2
- ------- ------- ------- -------
$ 25.6 $ 21.5 +19 OPERATING INCOME $ 54.4 49.9 +9
======= ======= ======= =======
OPERATING STATISTICS:
2,273 2,130 +7 Millions of Pounds Hauled - LTL 6,517 6,337 +3
2,493 2,318 +8 Millions of Pounds Hauled - Combined 7,146 6,891 +4
$ 14.13 $ 14.23 -1 Revenue/CWT - LTL $ 13.90 $ 14.00 -1
$ 13.45 $ 13.64 -1 Revenue/CWT - Combined $ 13.24 $ 13.44 -1
13,675 14,065 -3 Average Employees 13,501 13,759 -2
77c. 84c. -8 Average Fuel Price Per Gallon 71c. 88c. -19
15,954 16,008 - Fuel Consumed in Gallons (000s) 47,140 48,650 -3
7.3 6.6 +0.7 pt. Operating Margin (%) 5.5 5.2 +0.3 pt.
92.7 93.4 -0.7 pt. Operating Ratio (%) 94.5 94.8 -0.3 pt.
</Table>
a) Includes the pro forma effects of the Motor Cargo acquisition, as if the
acquisition had been effective January 1, 2001. The actual results of
Overnite Transportation Company for the third quarter and year-to-date of
2001, respectively, were as follows: Operating Revenues - $292.1 and
$862.1, Operating Expenses - $273.8 and $819.7, and Operating Income $18.3
and $42.4.
October 24, 2002 (5)
UNION PACIFIC CORPORATION
STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
As of September 30, 2002 and December 31, 2001
(Dollars in Millions)
(Unaudited)
<Table>
<Caption>
September 30, December 31,
2002 2001
------------- ------------
ASSETS:
Cash and Temporary Investments $ 451 $ 113
Other Current Assets 1,640 1,429
Investments 695 786
Properties - Net 29,373 28,792
Other Assets 466 431
------- -------
Total $32,625 $31,551
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Portion of Long Term Debt $ 294 $ 194
Other Current Liabilities 2,598 2,552
Long Term Debt 7,580 7,886
Deferred Income Taxes 8,277 7,882
Other Long Term Liabilities 1,877 1,962
Convertible Preferred Securities 1,500 1,500
Common Shareholders' Equity 10,499 9,575
------- -------
Total $32,625 $31,551
======= =======
</Table>
October 24, 2002 (6)
UNION PACIFIC CORPORATION
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Nine Months Ended September 30
(Dollars in Millions)
(Unaudited)
<Table>
<Caption>
2002 2001
------- -------
OPERATING ACTIVITIES:
Net Income $ 963 $ 691
Depreciation 901 877
Deferred Income Taxes 387 344
Other (408) (550)
------- -------
Cash Provided by Operating Activities 1,843 1,362
------- -------
INVESTING ACTIVITIES:
Capital Investments (1,468) (1,354)
Other 250 80
-------- -------
Cash Used in Investing Activities (1,218) (1,274)
------- -------
FINANCING ACTIVITIES:
Dividends Paid (151) (148)
Debt Repaid (1,032) (792)
Financings and Other - Net 896 867
------- -------
Cash Used in Financing Activities (287) (73)
------- -------
NET CHANGE IN CASH AND TEMPORARY INVESTMENTS $ 338 $ 15
======= =======
</Table>
October 24, 2002 (7)