Union Pacific Corp. consists of one reportable segment, rail transportation, and the company's other product lines. The railsegment includes the operations of the corporation's wholly owned subsidiary, Union Pacific Railroad Company and Union Pacific Railroad Company's subsidiaries and rail affiliates. The company's other operations include the trucking product line, as well as the other product lines that include technology, self-insurance activities, corporate holding company operations, and all appropriate consolidating entries.
Industry:TRANS-RAIL Sector: Transportation Fiscal Year End:December Last Reported Quarter:06/30/10 Next EPS Date:10/21/10
Capital Structure Solvency and Cash Flow
UNP ended 4Q09 with $1,850.0 million in cash on its balance sheet versus $1,249.0 million at the end of 4Q08. Adjusted debt-to-capital ratio was 45.9% in FY09 versus 47.4% in FY08. Return on Invested Capital (ROI) was 8.2% in FY09 versus 10.2% in FY08.
Capital expenditures were $2,384.0 million in FY09 versus $2,780.0 million in FY08. Free cash flow decreased to $3,234.0 million at the end of FY09 from $4,070.0 million at the end of FY08.
The Company expects capital expenditures for FY10 to be $2.5 billion (largely inline with FY09), including $200.0 million allocated for Positive Train Control (PTC), an unfunded government mandate that allows locomotives to shut down if they move too close to each other. The capex budget excludes any new locomotive purchases, as the Company still has 1,600 in storage, and is tightening expansion capital due to its excess capacity and uncertain pending Congressional legislation. The Company expects to spend $150.0 million of its capital budget on its new Joliet Intermodal Terminal, which is intended to facilitate the conversion of more business from highway to rail.
Last edited Mon Mar 15, 2010 05:43 AM by BipashaChowdhury (Zacks Investment Research)
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Governance Social Responsibility and Employee Relations
• Regulated Industry: The potential for increased government regulation to constrain rate increases will affect rail profit growth if current proposed legislation gains traction in Congress.
• Fuel Costs: High fuel cost is expected to negatively impact financial results.
• Competition: The Company faces competition from other railroads, motor carriers, and to a lesser extent, ships, barges, and pipelines.
• Cyclical Exposure: Railroads earnings can be highly cyclical, given the asset intensity and dependency on economic growth.
• Significant Coal Exposure: Coal is one of the rail's largest and most profitable commodities. Increased environment regulation pressure would negatively impact long-term coal demand.
Last edited Mon Mar 15, 2010 05:45 AM by BipashaChowdhury (Zacks Investment Research)
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Last Modification: Thursday 03 of June, 2010 09:00:13 CDT by WikiMigrationBot.
