Union Pacific Reports Record Third Quarter Earnings

(From today's press release)

Operating Income Gains 34 Percent

Omaha, Neb., October 18, 2007 – Union Pacific Corporation (NYSE: UNP) today reported third quarter 2007 net income of $532 million or $2.00 per diluted share, compared to $420 million, or $1.54 per diluted share in the same quarter last year. Operating income during the third quarter 2007 was $1.0 billion, up from $752 million reported in the third quarter of 2006.

"Our third quarter performance was driven by strong results on both sides of the earnings equation, setting volume and revenue records while at the same time improving safety and productivity," said Jim Young, Chairman and Chief Executive Officer. "I’m particularly pleased that our operating initiatives, along with the capital investments we are making for growth and efficiency, enabled us to improve customer service in the face of record volume."

2007 Third Quarter Summary

- Operating revenue set an all-time quarterly record, growing 5 percent to $4.2 billion compared to $4.0 billion in the third quarter 2006. Three business teams, Chemicals, Energy and Intermodal, achieved all-time record revenue in the third quarter 2007.

- Operating ratio improved 5.1 points versus the third quarter 2006 to 76 percent. The Company’s ongoing safety performance improvement was recognized in a periodic actuarial study, driving a $47 million casualty expense reduction ($29 million after tax). This contributed 1.1 points to the operating ratio improvement.

- An Illinois tax law change during the third quarter 2007 resulted in a non-cash after tax reduction to earnings of $27 million. This change will increase our future Illinois income taxes.

- The Company’s third quarter 2007 fuel consumption rate, as measured by gallons per thousand gross ton-miles, was a best-ever quarterly rate of 1.22 versus 1.26 in the third quarter 2006.

- While quarterly carload volume grew 1 percent, average terminal dwell, as reported to the Association of American Railroads, improved 4 percent year-over-year to 25.2 hours and average third quarter train speed improved slightly to 21.5 mph from 21.3 mph in 2006.

- The Company repurchased more than 4.5 million common shares at an average share price of $115.93 in the third quarter of 2007. Year-to-date purchases total 10.2 million common shares or 51 percent of the 20 million share repurchase program.

Third Quarter Railroad Commodity Revenue Summary versus 2006

Agricultural up 12 percent
Chemicals up 9 percent
Energy up 8 percent
Automotive up 7 percent
Intermodal up 3 percent
Industrial Products down 4 percent

Looking Forward

"Near-term, we remain cautious on the economy and see challenges from rapidly increasing diesel fuel prices," Young said. "However, we are confident regarding Union Pacific’s opportunities to further improve returns through profitable revenue growth and greater productivity. I believe our future is bright because of the men and women of Union Pacific who are dedicated to working safely to improve customer service and shareholder value."

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 and serves the fastest-growing U.S. population centers. Union Pacific’s diversified business mix includes Agricultural Products, Automotive, Chemicals, Energy, Industrial Products and Intermodal. The railroad offers competitive long-haul 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.

No mention by Mr. Young how much savings the company saw by denying thousands of legitimate TE&Y time-slips.

I wonder why?

I think that was probably included in this part:

UP Management wrote:- Operating ratio improved 5.1 points versus the third quarter 2006 to 76 percent.

Gee, they can't itemize everything!

I think you are correct Mr. LCJ!

Thanks!

BTW, I do have to say that for some reason Banking Operations did a direct deposit into my bank account last week. All my statement said on-line was manual DD for $79.62. It took my bank a day to figure out where the funds came from, but they got back to me and said it was the UP. Amazing, I left the UP in March and am getting a DD from them. I wonder if it was a denied claim from 2004 or something that they finally figured out, 'oh we owe this guy money!'

Good things come to those who wait.

- Deleted by UPRR engineer -

Same goes for that kinda post.

I dont really care, and this IS NOT the place to cry about it. Ask you local chairmen why things suck for you. Lets leave it at that, vent elsewhere.



Last warning there dude.

I think those results are funny considering everywhere I read even the UP Website last quarter showed business was off over previous years quarter, even our crew boards were cut due to the slow down obviously they must have been running more trains on the southern corridor.

Its interesting isn't it about how third quarter brought profits from last year. I can tell you this much. In the Western Region, specifically Hinkle, Nampa, and Spokane, there is ALOT of bumping going on because the boards have been cut. Alot of the guys who work east pool and west pool with more seniority than me are being bumped and coming into the yard at Hinkle. There aren't many places for me to go and I am hoping I am not one of the ones who are put on the furlough board. It is a domino effect and alot of people are disgruntled because of this article and the fact that some of us were already on the AWTS board ealier in the year. There are 12 on the furlough board right now.... so I wonder where all the profits are going? Must be nice to get a $16 million dollar bonus.......