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SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 22, 1998 Union Pacific Corporation (Exact Name of Registrant as Specified in its Charter) Utah 1-6075 13-2626465 (State or Other (Commission (I.R.S. Employer Jurisdiction of File Number) Identification No.) Incorporation) 1717 Main Street, Suite 5900, Dallas, Texas 75201 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (214) 743-5600 N/A Former Name or Former Address, if Changed Since Last Report 1 Item 5. Other Events. Attached as an Exhibit is the Press Release issued by Union Pacific Corporation on October 22, 1998 announcing Union Pacific Corporation's financial results for the third quarter of 1998, which is incorporated herein by reference. Item 7. Financial Statements and Exhibits. (c) Exhibits. 99 Press Release dated October 22, 1998 announcing Union Pacific Corporation's financial results for the third quarter of 1998.
2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Union Pacific Corporation has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: October 23, 1998 UNION PACIFIC CORPORATION By: /s/ John J. Koraleski --------------------- John J. Koraleski Controller and Chief Accounting Officer
INDEX EXHIBIT INDEX Exhibit Description 99 Press Release dated October 22, 1998 announcing Union Pacific Corporation's financial results for the third quarter of 1998.
EXHIBIT 99
FOR IMMEDIATE RELEASE
UNION PACIFIC CORPORATION ANNOUNCES THIRD QUARTER RESULTS
Dallas, TX, October 22, 1998 -- Union Pacific Corporation today
reported a return to profitability, with income from continuing
operations of $32 million, or $.13 per diluted share, in the third
quarter of 1998 (including $7 million after-tax, or $.03 per
diluted share, in one-time merger expenses). Results were affected
by service problems in southern California, which significantly
improved during the quarter, and traffic slow-downs related to
major track maintenance and capacity expansion efforts along the
Railroad's central corridor. Including results from Overnite
Transportation, the Corporation's discontinued operation, net
income totaled $38 million, or $.15 per diluted share, in the
quarter. In the third quarter of 1997, income from continuing
operations was $237 million, or $.95 per diluted share, while net
income totaled $240 million, or $.96 per diluted share.
Operating income from continuing operations totaled $203
million for the Corporation in the quarter. A 7 percent decline in
revenues combined with a 2 percent increase in operating expenses
to generate an operating ratio of 91.6. While this was 7.7 points
higher than the prior year, it reflected an improvement from the
operating ratio in the second quarter of 1998, as service levels
have improved. In the third quarter of 1997, operating income
totaled $415 million.
At Overnite Transportation, operating income totaled $12
million compared to $14 million in 1997 (before goodwill
amortization in both periods). Revenues in the quarter increased 3
percent from the prior year on the strength of a 4 percent increase
in average revenue per hundredweight. Total volume declined 1
percent versus the prior year, with 1997 reflecting the benefits of
traffic from last year's UPS strike. Overnite's operating ratio
increased 0.9 percentage points, year-over-year, to 95.4 reflecting
higher operating costs. Although the Corporation's proposed
initial public offering of Overnite was postponed in the third
quarter, the Corporation still intends to divest of this non-core
subsidiary as market conditions permit.
For the first nine months of 1998, the Corporation reported a
loss from continuing operations of $191 million and a net loss of
$443 million. This compares with 1997 income from continuing
operations of $585 million and net income of $584 million.
"Financial and operating results are not yet where they need
to be," said Dick Davidson, Chairman and Chief Executive Officer,
"but we believe we have turned the corner on profitability. It will
be a gradual process, but with a renewed focus on quality and
service, we are committed to making Union Pacific a company where
customers want to do business, employees are proud to work, and
value is created for our shareholders."
Third quarter and nine month income statements are attached.
Media inquiries should be directed to John Bromley at Union
Pacific Railroad, (402) 271-3475.
(This press release contains forward-looking statements within
the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934. Such forward-looking information is based on
information available at this time and is subject to risks and
uncertainties that could cause actual results to differ materially
from those expressed in the statements. Important factors that
could cause such differences include, but are not limited to,
whether the Railroad is fully successful in overcoming its
congestion-related problems and implementing its service recovery
plans, industry competition, regulatory developments, natural
events such as floods and earthquakes, the effects of adverse
general economic conditions, fuel prices, labor strikes, the impact
of the year 2000 systems problems and the ultimate outcome of
shipper claims related to congestion, environmental investigations
or proceedings and other types of claims and litigations.)
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED INCOME
For the Three Months Ended September 30
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
Third Quarter Pct
1998 1997 Chg
Operating Revenues . . . . . . . . . . . $2,404 $2,575 -7
Operating Expenses - a). . . . . . . . . 2,201 2,160 +2
Operating Income . . . . . . . . . . . . 203 415 U
Other Income - Net. . . . . . . . . . . 37 102 U
Interest Expense. . . . . . . . . . . . 189 156 +21
Income Before Income Taxes . . . . . . . 51 361 U
Income Tax Expense. . . . . . . . . . . (19) (124) F
Income From Continuing Operations. . . . $ 32 $ 237 U
Income from Discontinued Operations . . 6 3 F
Net Income . . . . . . . . . . . . . . . $ 38 $ 240 U
Diluted Earnings Per Share:
Income From Continuing Operations. . . . $ 0.13 $ 0.95 U
Income from Discontinued Operations. . . 0.02 0.01 F
Net Income . . . . . . . . . . . . . . . $ 0.15 $ 0.96 U
Average Basic Shares Outstanding (MM). . 246.1 245.9 -
Average Diluted Shares Outstanding (MM) -b) 246.7 248.6 -
a) Includes one-time merger expenses of $12 million pre-tax ($7 million
after-tax or $.03 per diluted share) in 1998, $16 million pre-tax ($10 million
after-tax or $.04 per share) in 1997. Merger expenses include severance,
relocation and certain other costs related to Union Pacific employees
affected by the merger.
b) Excludes 21.8 million anti-dilutive common stock equivalents in 1998.
October 22, 1998
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED INCOME
For the Nine Months Ended September 30
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
Year-to-Date
Pct
1998 1997 Chg
Operating Revenues . . . . . . . . . . . . $7,094 $7,817 -9
Operating Expenses - a). . . . . . . . . . 7,012 6,611 +6
Operating Income . . . . . . . . . . . . . 82 1,206 U
Other Income - Net. . . . . . . . . . . . 113 159 -29
Interest Expense. . . . . . . . . . . . . 526 451 +17
Income (Loss) Before Income Taxes. . . . . (331) 914 U
Income Tax Benefit (Expense). . . . . . . 140 (329) F
Income (Loss) From Continuing Operations . $ (191) $ 585 U
Loss from Discontinued Operations . . . . (252) (1) U
Net Income (Loss). . . . . . . . . . . . . $ (443) $ 584 U
Diluted Earnings Per Share:
Income (Loss) From Continuing Operations . $(0.78) $ 2.36 U
Loss from Discontinued Operations. . . . . (1.02) (0.01) U
Net Income (Loss). . . . . . . . . . . . . $(1.80) $ 2.35 U
Average Basic Shares Outstanding (MM). . . 246.0 245.7 -
Average Diluted Shares Outstanding (MM)-b) 246.0 248.0 -
a) Includes estimated one-time merger expenses of $58 million pre-tax
($36 million after-tax or $.15 per diluted share) in 1998, $75 million
pre-tax ($46 million after-tax or $.19 per share) in 1997. Merger expenses
include severance, relocation and certain other costs related to Union
Pacific Employees affected by the merger.
b) Excludes 16.0 million anti-dilutive common stock equivalents in 1998.
October 22, 1998