EXHIBIT 99
UNION PACIFIC REPORTS RECORD REVENUE OF $3.3 BILLION
FOR IMMEDIATE RELEASE:
OMAHA, NE, JULY 24, 2003 - Union Pacific Corporation (NYSE: UNP) today
reported second quarter net income of $288 million, or $1.10 per diluted share.
This compares to net income of $304 million, or $1.15 per diluted share in the
second quarter of 2002. Operating income was $605 million, compared to $602
million in 2002. The 2003 results include a one-time expense of $.03 per diluted
share for costs associated with the $500 million redemption of the Corporation's
convertible preferred securities.
"This was our best quarter ever in terms of revenue. In a weak economic
climate with carloadings flat compared to last year, this excellent revenue
performance indicates the strength of our business mix," said Dick Davidson,
chairman and chief executive officer. "And, although fuel surcharges contributed
to our revenue growth, they did not fully mitigate the additional $54 million of
Railroad fuel expense incurred due to a $.16 per gallon increase in diesel
prices from a year ago."
SECOND QUARTER HIGHLIGHTS
Union Pacific Corporation, excluding Overnite Corporation, reported
second quarter operating income of $584 million compared to $583 million for the
same period in 2002.
o Railroad Operating Revenue increased 3 percent
-M O R E-
-2-
o Employee Productivity (gross ton-miles/employee) increased 4 percent
to a second quarter record level
o Operating Margin was 20.2 percent, compared to last year's
second quarter 20.7 percent
SECOND QUARTER RAILROAD COMMODITY REVENUE SUMMARY VERSUS 2002
- - Agricultural up 6 percent
- - Energy up 6 percent
- - Industrial Products up 5 percent
- - Intermodal was flat
- - Automotive down 2 percent
- - Chemicals down 2 percent
"The key takeaway here is that our franchise diversity is vital to
sustained revenue growth," Davidson said. "In a tough economy, our less cyclical
businesses - such as Agriculture and Energy - can lead us to greater
profitability."
OVERNITE CORPORATION
Overnite Corporation reported a 15 percent increase in second quarter
operating income of $21.0 million, compared to $18.2 million in 2002. Operating
revenue was up 10 percent to $372.0 million from $337.1 million last year.
Overnite's operating ratio was 94.4 percent compared to 94.6 percent.
-M O R E-
-3-
LOOKING FORWARD
"We are cautiously upbeat about the second half of the year," Davidson
said. "One cloud on the horizon, however, is energy prices. Diesel fuel and
natural gas prices have remained stubbornly high, affecting our customers'
businesses and our cost structure as well as creating a drag on the overall
economy. We remain focused on running a quality, profitable Company and, with
help from a little stronger economy, we're positioned for growth."
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 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.
-M O R E-
-4-
ADDITIONAL INFORMATION IS AVAILABLE AT OUR WEB SITE: www.up.com. OUR
CONTACT FOR INVESTORS IS JENNIFER HAMANN AT (402) 271-4227. OUR MEDIA CONTACT IS
KATHRYN BLACKWELL AT (402) 271-3753.
**********
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
operational improvements; expectations as to cost savings, revenue growth and
earnings; the time by which certain objectives will be achieved; 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, statements of management's 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 is based on information available at the time and/or
management's good faith belief with respect to future events, and is 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; industry competition, conditions, performance and
consolidation; legislative and regulatory developments, including possible
enactment of new tax rates and possible enactment of initiatives to re-regulate
the rail industry; 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.
-0-
UNION PACIFIC CORPORATION
STATEMENTS OF CONSOLIDATED INCOME
For the Three Months Ended June 30
(Dollars in Millions, Except Per Share Amounts)
(Unaudited)
<Table>
<Caption>
2003 2002 Pct Chg
------- ------- -------
OPERATING REVENUES $ 3,266 $ 3,159 + 3
Operating Expenses 2,661 2,557 + 4
------- -------
OPERATING INCOME 605 602 F
Other Income - Net 5 35 - 86
Interest Expense (150) (159) - 6
------- -------
INCOME BEFORE INCOME TAXES 460 478 - 4
Income Tax Expense (172) (174) - 1
------- -------
NET INCOME $ 288 $ 304 - 5
======= =======
BASIC EARNINGS PER SHARE $ 1.13 $ 1.21 - 7
DILUTED EARNINGS PER SHARE $ 1.10 $ 1.15 - 4
Average Basic Shares Outstanding (MM) 253.9 251.8
Average Diluted Shares Outstanding (MM) 271.7 276.3
</Table>
July 24, 2003
(1)
UNION PACIFIC CORPORATION
STATEMENTS OF CONSOLIDATED INCOME
For the Six Months Ended June 30
(Dollars in Millions, Except Per Share Amounts)
(Unaudited)
<Table>
<Caption>
2003 2002 Pct Chg
------- ------- -------
OPERATING REVENUES $ 6,343 $ 6,130 + 3
Operating Expenses 5,357 5,029 + 7
------- -------
OPERATING INCOME 986 1,101 - 10
Other Income - Net 18 56 - 68
Interest Expense (301) (322) - 7
------- -------
INCOME BEFORE INCOME TAXES 703 835 - 16
Income Tax Expense (260) (309) - 16
------- -------
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 443 526 - 16
Cumulative Effect of Accounting Change a) 274 -- F
------- -------
NET INCOME $ 717 $ 526 + 36
======= =======
BASIC EARNINGS PER SHARE
Income Before Cumulative Effect of Accounting Change $ 1.75 $ 2.09 - 16
Cumulative Effect of Accounting Change 1.08 -- F
------- -------
Net Income $ 2.83 $ 2.09 + 35
======= =======
DILUTED EARNINGS PER SHARE
Income Before Cumulative Effect of Accounting Change $ 1.70 $ 2.01 - 15
Cumulative Effect of Accounting Change 1.01 -- F
------- -------
Net Income $ 2.71 $ 2.01 + 35
======= =======
Average Basic Shares Outstanding (MM) 253.6 251.4
Average Diluted Shares Outstanding (MM) 271.2 276.1
</Table>
a) Cumulative effect of accounting change relates to the adoption of Statement
of Financial Accounting Standards No. 143, "Accounting for Asset Retirement
Obligations", and is presented net of $167 million tax.
July 24, 2003
(2)
UNION PACIFIC RAILROAD
REVENUE DETAIL
Periods Ended June 30
(Unaudited)
<Table>
<Caption>
Second Quarter Year-to-Date
2003 2002 Pct Chg 2003 2002 Pct Chg
----------- ----------- ------- ----------- ----------- -------
COMMODITY REVENUE (000):
$ 373,776 $ 353,937 + 6 Agricultural $ 746,783 $ 722,694 + 3
320,066 325,536 - 2 Automotive 622,199 608,040 + 2
393,211 402,351 - 2 Chemicals 787,450 787,519 -
601,490 569,474 + 6 Energy 1,162,885 1,151,687 + 1
560,851 533,240 + 5 Industrial Products 1,070,405 1,006,957 + 6
514,536 514,362 - Intermodal 981,129 969,578 + 1
----------- ----------- ----------- -----------
$ 2,763,930 $ 2,698,900 + 2 Total $ 5,370,851 $ 5,246,475 + 2
============ =========== =========== ===========
REVENUE CARLOADS:
205,728 210,530 - 2 Agricultural 419,949 427,262 - 2
214,232 219,103 - 2 Automotive 420,894 412,290 + 2
225,618 232,820 - 3 Chemicals 445,071 450,269 - 1
536,900 519,852 + 3 Energy 1,057,929 1,065,082 - 1
382,539 373,201 + 3 Industrial Products 722,586 697,430 + 4
752,504 770,972 - 2 Intermodal 1,445,013 1,452,141 -
----------- ----------- ----------- -----------
2,317,521 2,326,478 - Total 4,511,442 4,504,474 -
============ =========== =========== ===========
AVERAGE REVENUE PER CAR:
$ 1,817 $ 1,681 + 8 Agricultural $ 1,778 $ 1,691 + 5
1,494 1,486 + 1 Automotive 1,478 1,475 -
1,743 1,728 + 1 Chemicals 1,769 1,749 + 1
1,120 1,095 + 2 Energy 1,099 1,081 + 2
1,466 1,429 + 3 Industrial Products 1,481 1,444 + 3
684 667 + 3 Intermodal 679 668 + 2
----------- ----------- ----------- -----------
$ 1,193 $ 1,160 + 3 Total $ 1,190 $ 1,165 + 2
============ =========== =========== ===========
</Table>
July 24, 2003
(3)
RAIL AND OTHER OPERATIONS - a)
REVIEW OF OPERATIONS
Periods Ended June 30
(Dollars in Millions, Except Operating Statistics)
(Unaudited)
<Table>
<Caption>
Second Quarter Year-to-Date
2003 2002 Pct Chg 2003 2002 Pct Chg
- --------- --------- ------- --------- --------- -------
$ 2,894 $ 2,822 + 3 OPERATING REVENUES $ 5,630 $ 5,484 + 3
OPERATING EXPENSES
952 913 + 4 Salaries and Benefits 1,916 1,826 + 5
298 308 - 3 Rent Expense 608 623 - 2
253 286 - 12 Depreciation 528 570 - 7
323 268 + 21 Fuel and Utilities 675 493 + 37
99 125 - 21 Materials and Supplies 202 246 - 18
385 339 + 14 Purchased Services and Other 749 654 + 15
- --------- --------- --------- ---------
2,310 2,239 + 3 Total 4,678 4,412 + 6
- --------- --------- --------- ---------
$ 584 $ 583 - OPERATING INCOME $ 952 $ 1,072 - 11
========= ========= ========= =========
OPERATING STATISTICS:
2,317 2,326 - Revenue Carloads (Thousands) 4,511 4,504 -
132.3 129.0 + 3 Revenue Ton-Miles (Billions) 258.7 256.0 + 1
253.8 248.0 + 2 Gross Ton-Miles (Billions) 495.1 488.0 + 1
2.09(cent) 2.09(cent) - Rev/RTM (Commodity Revenue Based) 2.08(cent) 2.05(cent) + 1
$ 1,193 $ 1,160 + 3 Average Commodity Revenue Per Car $ 1,190 $ 1,165 + 2
46,859 47,774 - 2 Average Employees 46,565 47,505 - 2
88(cent) 72(cent) + 22 Average Fuel Price Per Gallon 94(cent) 67(cent) + 40
332 334 - 1 Fuel Consumed in Gallons (MM) 651 655 - 1
1.31 1.35 - 3 Fuel Consumption Rate (Gal/000 GTM) 1.31 1.34 - 2
20.2 20.7 - 0.5 pt. Operating Margin (%) 16.9 19.6 - 2.7 pt.
79.8 79.3 + 0.5 pt. Operating Ratio (%) 83.1 80.4 + 2.7 pt.
</Table>
a) Excludes Overnite's operations.
July 24, 2003
(4)
OVERNITE CORPORATION
REVIEW OF OPERATIONS
Periods Ended June 30
(Dollars in Millions, Except Operating Statistics)
(Unaudited)
<Table>
<Caption>
Second Quarter Year-to-Date
2003 2002 Pct Chg 2003 2002 Pct Chg
- --------- --------- ------- --------- --------- -------
$ 372.0 $ 337.1 + 10 OPERATING REVENUES $ 713.2 $ 645.9 + 10
OPERATING EXPENSES
220.9 205.3 + 8 Salaries and Benefits 428.8 397.5 + 8
37.8 36.3 + 4 Rent Expense 73.4 66.0 + 11
14.4 14.3 + 1 Depreciation 28.8 29.3 - 2
20.5 16.4 + 25 Fuel and Utilities 42.7 31.5 + 36
15.1 13.3 + 14 Materials and Supplies 28.5 25.5 + 12
42.3 33.3 + 27 Other 77.4 67.4 + 15
- --------- --------- --------- ---------
351.0 318.9 + 10 Total 679.6 617.2 + 10
- --------- --------- --------- ---------
$ 21.0 $ 18.2 + 15 OPERATING INCOME $ 33.6 $ 28.7 + 17
========= ========= ========= =========
OPERATING STATISTICS:
2,344 2,222 + 5 Millions of Pounds Hauled - LTL 4,475 4,244 + 5
2,534 2,437 + 4 Millions of Pounds Hauled - Combined 4,875 4,653 + 5
$ 14.60 $ 13.94 + 5 Revenue/CWT - LTL $ 14.62 $ 13.98 + 5
$ 14.00 $ 13.27 + 6 Revenue/CWT - Combined $ 13.94 $ 13.32 + 5
14,287 13,670 + 5 Average Employees 13,959 13,414 + 4
91(cent) 72(cent) + 26 Average Fuel Price Per Gallon 96(cent) 68(cent) + 41
16,951 15,767 + 8 Fuel Consumed in Gallons (000s) 33,301 31,185 + 7
5.6 5.4 + 0.2 pt. Operating Margin (%) 4.7 4.4 + 0.3 pt.
94.4 94.6 - 0.2 pt. Operating Ratio (%) 95.3 95.6 - 0.3 pt.
</Table>
July 24, 2003
(5)
UNION PACIFIC CORPORATION
STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
As of June 30, 2003 and December 31, 2002
(Dollars in Millions)
(Unaudited)
<Table>
<Caption>
June 30, December 31,
2003 2002
-------- ------------
ASSETS:
Cash and Temporary Investments $ 499 $ 369
Other Current Assets 1,777 1,783
Investments 718 699
Properties - Net 30,473 29,505
Other Assets 470 408
------- -------
Total $33,937 $32,764
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Portion of Long Term Debt $ 170 $ 276
Other Current Liabilities 2,521 2,425
Long Term Debt 8,101 7,428
Deferred Income Taxes 8,842 8,478
Other Long Term Liabilities 2,008 2,006
Convertible Preferred Securities a) 1,000 1,500
Common Shareholders' Equity 11,295 10,651
------- -------
Total $33,937 $32,764
======= =======
</Table>
a) During the second quarter of 2003, $500 million of the Convertible Preferred
Securities were redeemed.
July 24, 2003
(6)
UNION PACIFIC CORPORATION
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Six Months Ended June 30
(Dollars in Millions)
(Unaudited)
<Table>
<Caption>
2003 2002
------- -------
OPERATING ACTIVITIES:
Net Income $ 717 $ 526
Cumulative Effect of Accounting Change a) (274) --
------- -------
Income Before Cumulative Effect of Accounting Change 443 526
Depreciation 556 599
Deferred Income Taxes 202 213
Other (114) (234)
------- -------
Cash Provided by Operating Activities 1,087 1,104
------- -------
INVESTING ACTIVITIES:
Capital Investments (891) (846)
Other 140 56
------- -------
Cash Used in Investing Activities (751) (790)
------- -------
FINANCING ACTIVITIES:
Dividends Paid (117) (100)
Debt Repaid (858) (697)
Financings and Other - Net 769 751
------- -------
Cash Used in Financing Activities (206) (46)
------- -------
NET CHANGE IN CASH AND TEMPORARY INVESTMENTS $ 130 $ 268
======= =======
</Table>
a) Cumulative effect of accounting change relates to the adoption of Statement
of Financial Accounting Standards No. 143, "Accounting for Asset Retirement
Obligations", and is presented net of $167 million tax.
July 24, 2003
(7)