Union Pacific's operating ratio of 68.3% was a fourth-quarter best, 1.9 points better than the previous record set in 2010.
"The dedicated efforts of our employees, combined with the strength of our diverse railroad franchise, drove record fourth quarter results," said UP Chairman and CEO Jim Young. "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 carload volume as measured by total revenue carloads, grew 3% percent versus 2010. Four of six business groups—chemical, automotive, energy, and industrial products— generated strong increases. Quarterly operating revenue increased 16% to a record $5.1 billion versus $4.4 billion in the fourth quarter of 2010.
The Customer Satisfaction Index of 92 tied a quarterly best and was two points better than the fourth quarter 2010.
In Union Pacific's quarterly earnings conference Thursday, Executive Vice President Operations Lance M. Fritz disclosed details of a planned 2012 capital investment program of "around $3.6 billion." On the equipment side, UP plans to acquire 200 new road locomotives and close to 1,800 freight cars. including covered hoppers, gondolas, and designed and belt AutoFlex auto racks. In addition to replacement spending and investments for growth, UP plans to spend $335 million this year on Positive Train Control. Fritz said the total estimated cost of UP's PTC has escalated from $1.4 billion to around $2 billion, of which UP had spent nearly $400 million by Jan. 1.