UNION PACIFIC CORPORATION (NYSE:UNP) Files An 8-K Costs Associated with Exit or Disposal ActivitiesItem 2.05 Costs Associated with Exit or Disposal Activities
On August 16, 2017, Union Pacific Corporation (the “Company”) approved and commenced a management and administrative personnel reorganization plan (the “Plan”) furthering its on-going efforts to increase efficiency and more effectively align Company resources.The Plan will implement productivity initiatives identified during a recently completed Company-wide organizational review.The Plan is expected to be substantially complete by September 30, 2017, to affect up to 750 employees, and to provide approximately $110 million in annual productivity savings.The Plan excludes the executive officers of the Company identified in the Company’s 2016 Annual Report on Form 10-K.
The Plan is expected to result in a pretax charge of approximately $90 million from employee-termination benefits, including pension expenses, cash severance costs, and acceleration of equity compensation.The actual amount of this charge may be more or less than $90 million depending on the final number of individuals included in the Plan and their calculation of benefits under the Plan.The Plan includes approximately $15 million of cash expenditures primarily related to one-time severance costs.The Company expects that substantially all of this charge will be recognized in the third quarter of 2017.
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This Form 8-K disclosure contains forward-looking statements, including expectations regarding the Company’s future operational and financial performance and results that are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements.Important factors, including risk factors, could affect the Company’s and its subsidiaries’ future results and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements.Information regarding risk factors and other cautionary information are available in the Company’s Annual Report on Form 10-K for 2016, which was filed with the Securities and Exchange Commission (the “SEC”) on February 3, 2017.The Company updates information regarding risk factors if circumstances require such updates in its periodic reports on Form 10-Q and its subsequent Annual Reports on Form 10-K (or such other reports that may be filed with the SEC).
About UNION PACIFIC CORPORATION (NYSE:UNP)
Union Pacific Corporation operates through its principal operating company, Union Pacific Railroad Company. Union Pacific Railroad Company links approximately 20 states in the western two-thirds of the country by rail, providing link in the supply chain. The Company’s business mix includes agricultural products, automotive, chemicals, coal, industrial products and intermodal. The Company operates from West Coast and Gulf Coast ports to eastern gateways, connects with Canada’s rail systems and serves approximately six Mexico gateways. The Company is a Class I railroad operating in the United States. The Company’s network includes approximately 32,080 route miles, linking Pacific Coast and Gulf Coast ports with the Midwest and Eastern United States gateways and providing several corridors to Mexican gateways. The Company owns approximately 26,060 miles and operates on the remainder pursuant to trackage rights or leases.