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On the Record

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"We Are the Green Solution"

What's a few billion dollars spent on infrastructure when your vehicles get more than 700 mpg? An interview with Robert M. Knight Jr., EVP and CFO, Union Pacific Corp.

January 1, 2009

Rob Knight is one CFO who is still bullish on his business. And why not? His company — Omaha-based Union Pacific Corp., the country's largest railroad — has managed to deliver earnings and dividend growth even in the teeth of recession. The railroad's strong revenues from shipments of coal and agricultural products have offset falling demand for automotive and housing-related freight, while highway congestion and environmental concerns increasingly make rail transport seem like an efficient green alternative. That's not to say Union Pacific, which operates 33,000 route miles of track in 23 Western and Central states, is immune to the downturn. Its overall freight volumes shrank in 2008, and it expects flat or falling volumes in 2009. But as the 51-year-old Knight explains, a diverse customer base and a dedication to efficiency have kept Union Pacific's financial performance on track. The railroad's Q3 2008 earnings per share ($1.38) and operating income ($1.2 billion) were up 38 percent and 21 percent, respectively, and at press time Knight was optimistic that the fourth quarter would produce comparably sunny results. Read more...