Union Pacific announced that it has increased its 2010 capital expenditure program by $100 million in growth capital to a total of $2.6 billion. The railroad said the additional $100 million will be used primarily to buy new intermodal equipment “and support our intermodal strategy.” The action was taken at a board meeting in Omaha May 6.
“UP's domestic intermodal business grew 8% last year during one of the worst recessions in decades, as our record service performance attracted new business to our railroad,” said Jim Young, Union Pacific chairman and chief executive officer.
UP’s board of directors also voted to increase the quarterly dividend on the company’s common shares by 22% to 33 cents per share, payable July 1, 2010, to stockholders of record on May 28, 2010.
“With business volumes continuing to grow, we feel very positive about the long-term fundamentals of our business as well as UP's strategy to make the most of these opportunities,” said Young. “As a result, we are generating solid free cash flows and have confidence going forward that we are taking the right steps to capitalize on our growth opportunities and reward our shareholders.”
UP also said it plans to resume share repurchases on an opportunistic basis under its existing program, which authorizes purchases of up to 32.6 million shares by March 31, 2011.