Union Pacific 2001 Annual Report Download - page 39

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Millions of Dollars, Except Per Share Amounts, Ratios and Employee Statistics
2001 2000[b] 1999 1998[c] 1997 1996 1995 1994[d] 1993[e] 1992
Additional Data
Rail commodity revenue................ 10,391 10,270 9,851 9,072 9,712 7,419 6,105 5,216 4,873 4,819
Trucking revenue ........................... 1,143 1,113 1,062 1,034 946 961 976 1,037 939 873
Rail carloads (000).......................... 8,916 8,901 8,556 7,998 8,453 6,632 5,568 4,991 4,619 4,458
Trucking shipments (000) ............. 7,981 7,495 7,708 7,789 7,506 8,223 8,332 8,593 8,206 7,669
Rail operating ratio (%)................. 80.7 82.3 82.0 95.4 87.4 79.1 78.1 77.9 79.1 79.0
Trucking operating ratio (%) [g] ... 95.3 95.2 98.1 94.8 96.8 104.9 103.0 91.3 90.2 90.9
Average employees (000) ............... 60.4 61.8 64.2 65.1 65.6 54.8 49.5 45.5 44.0 42.8
Revenue per employee (000) ......... 198.2 192.2 175.0 161.5 168.9 160.3 151.2 142.7 136.4 134.9
Financial Ratios (%)
Debt to capital employed............... 42.2 45.1 47.6 49.4 50.9 49.4 50.0 46.6 45.7 46.5
Return on equity [h] ....................... 10.6 10.1 10.5 (8.1) 5.3 12.4 16.5 10.9 11.1 16.5
[a] Data included the effects of the acquisitions of Motor Cargo as of November 30, 2001, Southern Pacific Rail Corporation as of October 1, 1996,
Chicago and North Western Transportation Company as of May 1, 1995, and Skyway Freight Systems, Inc. as of May 31, 1993, and reflects the
disposition of the Corporation’s natural resources subsidiary in 1996, waste management subsidiary in 1995 and Skyway Freight Systems in 1998.
[b] 2000 operating income and net income included $115 million pre-tax ($72 million after-tax) work force reduction charge (see note 15 to the
Consolidated Financial Statements, Item 8).
[c] 1998 operating loss and net loss included a $547 million pre-and after-tax charge for the revaluation of Overnite goodwill.
[d] 1994 net income included a net after-tax loss of $404 million from the sale of the Corporation’s waste management operations.
[e] 1993 net income included a net after-tax charge for the adoption of changes in accounting methods for income taxes, postretirement benefits
other than pensions and revenue recognition, and a one-time charge for the deferred tax effect of the Omnibus Budget Reconciliation Act of 1993.
[f] Based on results from continuing operations.
[g] Excluded goodwill amortization in all years, and the revaluation of goodwill in 1998.
[h] Based on average common shareholders’ equity.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the Consolidated Financial Statements and applicable notes
to the Consolidated Financial Statements, Item 8, and other information included in this Form 10-K.
As stated in Item 1, Union Pacific Corporation consists of two reportable segments, rail and trucking, as well as UPC’s
other product lines (Other). The rail segment includes the operations of UPRR and UPRR’s subsidiaries and rail affiliates
(collectively, the Railroad). The trucking segment includes the operations of Overnite and, subsequent to November 30,
2001, Motor Cargo. The Corporation's other product lines are comprised of the corporate holding company (which
largely supports the Railroad), Fenix LLC and affiliated technology companies (Fenix), self-insurance activities, and all
appropriate consolidating entries (see note 1 to the Consolidated Financial Statements, Item 8).
2001 COMPARED TO 2000 RESULTS OF OPERATIONS
Consolidated
Net Income – The Corporation reported record net income of $966 million ($3.90 per basic share and $3.77 per diluted
share) in 2001 compared to $842 million ($3.42 per basic share and $3.34 per diluted share) in 2000. Excluding the effect
of a $115 million pre-tax ($72 million after-tax) charge in 2000 related to a work force reduction plan at the Railroad,
2000 net income was $914 million ($3.71 per basic share and $3.61 per diluted share). The increase in net income
excluding the work force reduction charge in 2000 was due primarily to revenue growth, productivity gains and cost
control, lower non-operating expense and lower fuel prices.
Operating Revenues – Operating revenues increased $95 million (1%) to a record $12.0 billion in 2001, reflecting 1%
growth at the Railroad and 3% growth in the trucking segment. The Corporation recognizes transportation revenues
on a percentage-of-completion basis as freight moves from origin to destination. Other revenue is recognized as service
is performed or contractual obligations are met.