OMAHA, Neb. — Union Pacific Corp. reported 2009 second quarter net income of $468 million, or $0.92 per diluted share, compared to $531 million, or $1.02 per diluted share for the second quarter 2008. Included in the second quarter 2009 net income is $72 million, or $0.14 per diluted share, related to a June land sale to Colorado’s Regional Transportation District.
Union Pacific produced solid second quarter results despite a business environment that continues to be extremely challenging,” said Jim Young, Union Pacific chairman and chief executive officer. “This performance demonstrates our unrelenting focus on safety, productivity and customer service, which helped drive lower costs and improved returns.”
Second Quarter Summary
The continued weak global economy affected all six of Union Pacific’s business groups. Second quarter 2009 operating revenues totaled $3.3 billion versus $4.6 billion in the second quarter 2008. In addition:
- Business volumes, as measured by total revenue carloads, were down 22 percent versus the second quarter 2008. Reflecting lower volumes, year-over-year freight revenues declined 28 percent to $3.1 billion in the second quarter 2009. Lower fuel surcharge revenue in the second quarter, down over $500 million year-over-year, contributed to this decline.
- Quarterly diesel fuel prices decreased 56 percent from an average of $3.60 per gallon in the second quarter 2008 to an average of $1.57 per gallon. The second quarter 2009 fuel consumption rate, measured by gallons per thousand gross ton-miles, declined 6 percent to a quarterly best rate of 1.142.
- Second quarter 2009 operating ratio improved 2.3 points to 77.3 percent, in part as a result of the Company’s on-going efficiency initiatives and pricing gains. Union Pacific’s ongoing safety performance contributed about 1 point to the quarterly operating ratio improvement. A semi-annual actuarial study identified continued safety improvements and lower estimated settlement costs, resulting in a $38 million casualty expense reduction year-over-year.
- Union Pacific’s Customer Satisfaction Index improved 4 points to 87, matching the Company’s best quarterly mark.
- Quarterly train speed, as reported to the Association of American Railroads, was 27.4 mph, up nearly 5 mph or 20 percent versus the second quarter 2008. This improvement reflected productivity and operational improvements as well as lower volumes.
- In June 2009, the Company closed a land sale to Colorado’s Regional Transportation District, resulting in a $116 million pre-tax gain, adding $72 million to net income.