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11/29/2001



Rail News: Rail Industry Trends

Davidson's UP forecast calls for four more years of growth


Union Pacific Railroad next year expects to grow revenue between 1 percent and 3 percent, lower its operating ratio below third-quarter 2001's 79.7, and improve free cash flow and return on capital.
That's the forecast UP Chairman, President and Chief Executive Officer Dick Davidson provided analysts and investors Nov. 28 during opening remarks for UP's two-day analyst meeting in Omaha, Neb.
Between 2003 and 2005, UP predicts revenues to grow between 3 percent and 5 percent, earnings-per-share to post double-digit increases, the railroad's operating ratio to fall into the mid-70s, and free cash flow to reach between $500 million and $700 million annually.
UP is basing its predictions on its yield strategy, which is geared toward growing revenues through price adjustments, improved service and increased productivity, said Davidson, according to a prepared statement.
"Fundamentally, we expect to grow our business faster than the rate of economic expansion," he said, referring to economists' U.S. Gross Domestic Product growth forecasts that hover in the low-2 percent range.


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