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Q4 wraps up impressive 2011 for Union Pacific

Want some numbers to back up the renewed interest in freight rail growth? Look no further. Union Pacific Corporation, one of the worlds most prestigiou...

Freddie Pierce
|Jan 19|magazine11 min read

Want some numbers to back up the renewed interest in freight rail growth?

Look no further. Union Pacific Corporation, one of the world’s most prestigious freight rail companies, today reported 2011 fourth quarter net income of $964 million, or $1.99 per diluted share, compared to $775 million, or $1.56 per diluted share, in the fourth quarter 2010.

Union Pacific CEO Jim Young is rightfully pleased with his company’s progress in 2011.

“The dedicated efforts of our employees, combined with the strength of our diverse railroad franchise, drove record fourth quarter results,” Young said. “In 2011, we achieved best-ever marks in customer satisfaction and employee safety, invested a record $3.2 billion in capital, and generated record free cash flow of $1.9 billion. 2011 was the most profitable year in Union Pacific's history, allowing us to reward shareholders with increased financial returns.”

Fourth Quarter Summary

Fourth quarter business volumes, as measured by total revenue carloads, grew 3 percent versus 2010. Four of Union Pacific's six business groups - chemical, automotive, energy and industrial products - reported strong volume increases. In addition, quarterly operating revenue increased 16 percent in the fourth quarter 2011 to a record $5.1 billion versus $4.4 billion in the fourth quarter 2010.

Each of Union Pacific’s six business groups reported freight revenue growth in the fourth quarter driven by increased fuel cost recoveries and core pricing gains. Volume growth was also a contributing factor in four of the six business groups.

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Union Pacific’s operating ratio of 68.3 percent was a fourth quarter best, 1.9 points better than the previous fourth quarter record set in 2010. Pricing gains, volume growth and improved operating efficiency contributed to this record performance, more than offsetting the negative impact of higher diesel fuel prices compared to 2010.

Average quarterly diesel fuel prices increased 28 percent to $3.16 per gallon in the fourth quarter 2011 from $2.46 per gallon in the fourth quarter 2010.

In related news, the Customer Satisfaction Index of 92 tied a quarterly best and was two points better than the fourth quarter 2010.

Quarterly train speed, as reported to the Association of American Railroads, was 25.6 mph, decreasing 3 percent compared to the fourth quarter 2010.

More on Union Pacific

It was 150 years ago that Abraham Lincoln signed the Pacific Railway Act on July 1, 1862, creating the original Union Pacific. One of America's iconic companies, today, Union Pacific Railroad is the principal operating company of Union Pacific Corporation linking 23 states in the western two-thirds of the country by rail and providing freight solutions and logistics expertise to the global supply chain.

From 2000 through 2011, Union Pacific spent more than $31 billion on its network and operations, making needed investments in America's infrastructure and enhancing its ability to provide safe, reliable, fuel-efficient and environmentally responsible freight transportation.

Union Pacific's diversified business mix includes Agricultural Products, Automotive, Chemicals, Energy, Industrial Products and Intermodal. The railroad serves many of the fastest-growing U.S. population centers and emphasizes excellent customer service. Union Pacific operates competitive routes from all major West Coast and Gulf Coast ports to eastern gateways, connects with Canada's rail systems and is the only railroad serving all six major Mexico gateways.

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