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Rail News: Financials

UP to record fourth-quarter operating charge due to asbestos-claim liability

Yesterday, Union Pacific Corp. announced plans to record a non-cash, after-tax operating charge of $153.6 million in the fourth quarter because of increased liability for asbestos-related claims.

UP previously lacked "sufficient comparable history" to assess unasserted asbestos-related claims and recorded a liability for such claims only when they were asserted, according to a prepared statement. UP officials believe they now can better estimate the road's liability because the company hired a consulting firm to help determine the number and value of unasserted claims.

Officials expect ongoing asbestos-related expenses to decrease beginning next year, slightly increasing after-tax annual earnings about $8 million. For the fourth quarter, officials project earnings to range between 82 cents and 87 cents per diluted share and commodity revenue to increase about 8 percent compared with a previous 5 percent estimate.

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More News from 12/22/2004