Union Pacific 2001 Annual Report Download - page 4

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RELIABLE CONSISTENT SERVICE IS
FELLOW SHAREHOLDERS,
Our performance in 2001 demonstrated the strength of our franchise, the sound-
ness of our strategy and the value of our service. In a difficult economic environ-
ment, our business remained stable, achieving solid financial results. A few key
highlights:
•Net income was a record $966 million.
•Diluted earnings per share increased 4% to $3.77, excluding the impact of the
work force reduction charge in 2000, and gained momentum in the last half of
the year, with earnings per share up 11% over second half 2000.
•Tota l revenue rose 1% to a record $12 billion, with increases at both the Railroad
and Overnite.
•Despite the downturn in the economy, volume at the Railroad grew to a record
8.92 million carloads. Our diverse business mix paid off with strength in energy
and agricultural products offsetting the more economically sensitive commodities.
•Free cash flow increased for the third consecutive year to $250 million. This
enabled us to continue to reduce debt, driving the debt to total capitalization ratio
down by three percentage points.
•Our stock price increased 12% in 2001, capping a two-year period during which
the price increased 30% compared to a 22% decline in the S&P 500 and a 52%
reduction in the NASDAQ Composite Index.
We have the most powerful franchise in the rail industry, and our challenge
is to leverage this franchise with the right strategy. Our strategy is focused on bal-
anced growth, advances in customer service and continuous productivity
improvement. Our employees are at the heart of bringing this strategy to life,
leading the way with creative, innovative and intelligent solutions to the challenges
of our business.
From left: Leo Suggs, chairman and chief executive
officer, Overnite; Dick Davidson, chairman and
chief executive officer, Union Pacific Corporation;
Ike Evans, president and chief operating officer,
Union Pacific Railroad.
2
OUR EMPLOYEES ARE AT THE HEART OF
,