first quarter earnings release - union pacific...first quarter earnings release april 23, 2009 jim...
TRANSCRIPT
![Page 1: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/1.jpg)
1
First Quarter Earnings ReleaseApril 23, 2009
Jim Young, Chairman and CEO
![Page 2: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/2.jpg)
2
First Quarter 2009 Results
• EPS = $0.72
– Down 15% versus 2008
• Record Operating Ratio
• Quarterly Safety “Bests”
• Excellent Service
• Strong Balance Sheet
![Page 3: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/3.jpg)
3
First Quarter Marketing & Sales ReviewApril 23, 2009
Jack Koraleski, Executive VP – Marketing & Sales
![Page 4: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/4.jpg)
4
Intermodal
Agricultural
Chemicals
Automotive
Industrial
Energy
TOTAL
First Quarter Recap
-21%
-27%
-20%
-10%
-48%
-12%
-23%
Volume Revenue
-20%
-29%
-15%
-6%
-55%
-13%
-22%
![Page 5: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/5.jpg)
5
AgriculturalFirst Quarter 2009 Quarterly Results
• $661M, -13%
• -12% Carloadings
• $3,116 ARC, -1%
Quarterly Drivers
• Lower Grain Demand
• Reduction in Soybean Crush and Ethanol Production
• Produce RailexpressGrowth
Whole Grains*
2008 2009
103.2
76.1
-26%
Food & Refrigerated*
2008 2009
41.7
41.4
-1%
*Volume in (000s) of carloads
![Page 6: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/6.jpg)
6
AutosFirst Quarter 2009
Quarterly Results
• $162M, -55%
• -48% Carloadings
• $1,675 ARC, -13%
Quarterly Drivers
• U.S. Light Vehicle Sales Down 38% Year-Over-Year
• Extended Auto Shutdowns
Finished Vehicles*
2008
112.1
2009
51.4
-54%
2008
76.0
Vehicle Parts*
2009
45.6
-40%
*Volume in (000s) of carloads
![Page 7: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/7.jpg)
7
ChemicalsFirst Quarter 2009
Quarterly Results
• $513M, -15%
• -20% Carloadings
• $2,843 ARC, +6%
Quarterly Drivers
• Weak Demand Across Major Market Segments
Fertilizer*
2008
33.9
2009
22.4
-34%
2008
62.0
Liquid and Dry*
2009
44.5
-28%
*Volume in (000s) of carloads
![Page 8: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/8.jpg)
8
EnergyFirst Quarter 2009
Quarterly Results
• $807M, -6%
• -10% Carloadings
• $1,550 ARC, +5%
Quarterly Drivers
• SPRB Contract Losses
• Higher-than-Normal Coal Stockpiles
• CO/UT Production Issues
– Loaded 205 Fewer CO/UT Trains Year-Over-Year
SPRB Tonnage*
2008
45.0
2009
50.2-10%
2008
8.0
CO/UT Tonnage*
2009
10.1-21%
*Millions of Tons
First Quarter
Record
![Page 9: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/9.jpg)
9
2008
Steel*
2009
40.8
20.5
-50%
Industrial ProductsFirst Quarter 2009
Quarterly Results
• $546M, -29%
• -27% Carloadings
• $2,459 ARC, -3%
Quarterly Drivers
• Sharp Downturn in Steel Market
• Continued Softness in Housing & Construction
• High Inventories and Reduced Production of Paper
*Volume in (000s) of carloads
2008
Lumber & Building Materials*
2009
33.3
20.9
-37%
![Page 10: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/10.jpg)
10
IntermodalFirst Quarter 2009
International Volume*
2008
Domestic Volume*
2009
*Volume in (000s) of units
Quarterly Results
• $551M, -22%
• -23% Carloadings
• $897 ARC, +1%
Quarterly Drivers
• Weak Economy Impacts International and Domestic
• Lapping 2008 Contract Loss
• Service-Driven Product Offerings
510.6
355.9
285.0
258.7
-9%
-30%
2008 2009
![Page 11: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/11.jpg)
11
Inventories Working Against Rail Volume*
• Inventory Levels Down, But Not Enough
• Consumer Confidence at All-Time Lows
• Consumer Patterns Must Change to Break the Cycle
Average Retail Trade Inventories(First Quarter)
Average U.S. Car & Light Truck Inventories(January - April)
** January and February 2009
2006 2007 2008 2009**
$475.5
$489.2
$503.3
$475.0
1.48
1.47 1.47
1.54
Retail Inventory (Billions) Inventory/Sales Ratio
2006 2007 2008 2009
3.73.5
3.33.0
70 69 70
99
Inventory (Millions) Days Supply
* Inventory data taken from U.S. Census
Bureau and industry reports
![Page 12: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/12.jpg)
12
Leading Indicators
Southern Rock Loadings
Centerbeam Car Orders Gondola Car Orders
Boxcar Orders
2008
2009
2008
2009
2008
2009
2008
2009
Apr
Mar
Mar
Feb
Feb
Jan
Jan
Apr MarFebJan Apr
MarFebJan Apr
3,000
1,000
2,000
0
6,000
2,000
4,000
0
1,200
400
800
0
2,000
1,000
0
![Page 13: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/13.jpg)
13
79
87 8788
Customer Satisfaction Index
Good
Q1 JanQ2 Q3 Q4 Q2Q1 Q3 Q4
2007 2008 2009
Feb Mar
![Page 14: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/14.jpg)
14
First Quarter Operating ReviewApril 23, 2009
Dennis Duffy, Executive VP – Operations
![Page 15: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/15.jpg)
15
2009 Performance RecordsFirst Quarter
AAR VelocityMPH
11.0
Freight Car UtilizationCycle Days
27.2
2006 2009
21.3
9.1
Good
Good
2006 2009
2007 2008
2007 2008 2007 2008
2006
29.0
2009
24.3
2007 2008
AAR Terminal DwellHours
Good
Service Delivery Index*
66.0
2006 2009
91.9
Good
* Includes early deliveries
![Page 16: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/16.jpg)
16
120
140
160
180
200
220
2004 2006 2008 2009 YTD
Volume Variability
NetworkCapacity
Demand
7-Day
Carloads
(000)
• Crews
– Low Mileage Strategy
– Cutback Engineers
– AWTS / Furloughs
• Locomotives & Railcars
– Lease Returns
– Storage / Retirements
– Foreign Balance
• Train & Yard Operation
– Overtime / Shifts / Starts
– Business Rules
– Network Redesign
Decre
asin
g V
olu
me In
cre
asin
g V
olu
me
•Fixed Plant
• Working Resources
Thruput
![Page 17: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/17.jpg)
17
Aligning Working Resources
• Furloughs
– 26% (~4,500) TE&Y Employees
– ~ 700 Mechanical, Engineering, and Clerical
• Road Locomotives
– 31% (~1,900) in Storage
• Freight Cars
– 31% (~66,000) Parked
GTMs (millions)
Road
Locomotives
Freight Cars-26%
-24%
-18%
-21%
-20%
Train Starts (000s)
TE&Y Employees
First Quarter Average Resource Reductions –
Current Status
~~
~~
~~
~~
![Page 18: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/18.jpg)
18
Network Productivity
• Network Re-Design
– Shift Workload to Most
Efficient Facilities
– Combine Auto and
Intermodal Train Networks
• Terminal Cost Control
– Remote Control
Locomotives
– Shift Eliminations
– Staffing Reductions
– Reduced Ramp Operations
14 Major
Network
Yards
30 Regional Yards
60 Local Yards
![Page 19: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/19.jpg)
19
2009 Operating Initiatives
• Continue “Zero
Tolerance” on Safety
• Volume Variability with
Excellent Service
• Capital Efficiency
• Well Positioned for
Upside Leverage
![Page 20: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/20.jpg)
20
First Quarter Financial ReviewApril 23, 2009
Rob Knight, CFO
![Page 21: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/21.jpg)
21
Income Statement SummaryFirst Quarter – In Millions
Operating Revenues
Freight Revenues $ 3,240 $ 4,059
Other Revenues 175 211
Total Operating Revenues $ 3,415 $ 4,270
Operating Expenses
Compensation and Benefits 1,070 1,132
Purchased Services & Materials 399 469
Fuel 386 957
Depreciation 345 340
Equipment & Other Rents 317 342
Other 226 242
Total Operating Expenses $ 2,743 $ 3,482
Operating Income $ 672 $ 788
2009 2008 %
(20)
(17)
(20)
(5)
(15)
(60)
1
(7)
(7)
(21)
(15)
![Page 22: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/22.jpg)
22
Freight Revenue Drivers
Q1 Q1
$1,738
-9%
$1,755
Q2 Q3 Q4
$1,835
$1,931$1,891
Average Revenue Per Car
2008 2009
• $3.2 B Freight Revenue
– 20% Decline on 21% Lower Carloadings
• Pricing Gains Consistent with Outlook
– +5 to 6% Average Core Price
• Reduced Fuel Surcharges Lowering Customer Freight Bills
![Page 23: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/23.jpg)
23
Expense Initiatives Drive ResultsFirst Quarter
$3,482
$3,078
$2,743
20092008
Reported
Fuel Price
Adjusted*
-12%
Operating Expenses In Millions
55% Variability
Revenue Carloads (000s)
20092008
2,335
1,847
-21%
* See Union Pacific Web site under Investor Relations for a reconciliation to GAAP.
![Page 24: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/24.jpg)
24
Compensation & BenefitsFirst Quarter – In Millions
$1,132
2008 2009
$1,070
-5% • 8% Workforce Reduction
– Labor Productivity
– Lower Volume
• Wage & Benefit Inflation
![Page 25: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/25.jpg)
25
Purchased Services & MaterialsFirst Quarter – In Millions
$469
2008 2009
$399
-15%• Decreased Contract
Service Expense
• Reduced Crew Transportation & Lodging
![Page 26: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/26.jpg)
26
Fuel First Quarter
Average Fuel PricePer Gallon Consumed
Fuel ConsumptionGallons (in millions)
20092008
$2.84
$1.51
20092008
330
252
• 20% Decline in Gross Ton-Miles
• Improved Fuel Efficiency
– Fuel Consumption Rate Better By 5%
• Current Diesel Spot Price ~ $1.55 per gallon~~
![Page 27: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/27.jpg)
27
DepreciationFirst Quarter – In Millions
• Increased Capital Spending in 2008
• Lower Depreciation Rates Effective 1/1/09
$340
2008 2009
$345+1%
![Page 28: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/28.jpg)
28
Equipment and Other RentsFirst Quarter – In Millions
• Volume Savings
– Autos
– Intermodal
– Industrial Products
• Fewer Leased Assets
$342
2008 2009
$317
-7%
![Page 29: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/29.jpg)
29
OtherFirst Quarter – In Millions
• Decreased Freight & Property Damage Expense
• Lower Casualty Expenses
• Higher State & Local Taxes
• Increased Bad Debt Expense
$242
2008 2009
$226
-7%
![Page 30: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/30.jpg)
30
Operating Ratio ImprovementFirst Quarter (%)
2006 2007 2008 2009
83.7
81.3 81.580.3
• Lower Fuel Prices
• Price Increases
• Improved Productivity
• Volume Headwind
Average 7-Day Carloadings (000s)
187.2
145.5
![Page 31: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/31.jpg)
31
Full Income StatementFirst Quarter – In Millions (Except EPS)
Operating Revenues $ 3,415 $ 4,270
Operating Expenses 2,743 3,482
Operating Income $ 672 $ 788
Other Income – Net 23 25
Interest Expense (141) (126)
Income Before Income Taxes 554 687
Income Tax Expense (192) (244)
Net Income $ 362 $ 443
Diluted EPS $ 0.72 $ 0.85
2009 2008 %
(20)
(21)
(15)
(8)
12
(19)
(21)
(18)
(15)
![Page 32: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/32.jpg)
32
Debt & Liquidity*First Quarter – In Millions
* See Union Pacific Web site under Investor Relations for a reconciliation to GAAP.
**Lease Adjusted Total Debt
Lease Adjusted Debt to Capital
• Retired $250M Debt on 2/15
• Issued $750M Debt on 2/20
• 2009 Capital Closer to $2.6B
– ~ $150 - $200M ReductionCash Balance
20092008
20092008
$827
$1,466
Total Debt**
$12,639$14,387
44.8% 47.9%
~~
![Page 33: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/33.jpg)
33
Looking Ahead
200,000
100,000
150,000
Apr 16
2009Feb
2009
Dec
2008
Oct
2008
7-Day Carloadings
Chinese
New Year
Weather-Related
SPRB
Christmas
Holiday
Easter
Holiday
![Page 34: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/34.jpg)
34
First Quarter Earnings ReleaseApril 23, 2009
Jim Young, Chairman and CEO
![Page 35: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/35.jpg)
35
The Year Ahead
• Uncertain Economic Outlook
• Additional Cost and Efficiency Initiatives
• Investing for the Future
• Safety Gains
• Customer Service
• Strong Value of Rail Underscores Need for Balanced Regulation
![Page 36: First Quarter Earnings Release - Union Pacific...First Quarter Earnings Release April 23, 2009 Jim Young, Chairman and CEO 2 First Quarter 2009 Results •EPS = $0.72 –Down 15% versus](https://reader034.vdocument.in/reader034/viewer/2022051805/5ff53cae7fec20216e061d13/html5/thumbnails/36.jpg)
36
Cautionary InformationThis presentation and related materials contain statements about the Corporation’s future that are not statements of
historical fact, including specifically expectations regarding the Corporation’s outlook regarding economic conditions
and future business volumes, future operating performance, competitiveness of our service and, its ability to reduce
costs. These statements are, or will be, forward-looking statements as defined by the Securities Act of 1933 and the
Securities Exchange Act of 1934. Forward-looking statements also generally include, without limitation, information
or statements regarding: projections, predictions, expectations, estimates or forecasts as to the Corporation’s and
its subsidiaries’ business, financial, and operational results, and future economic performance; and management’s
beliefs, expectations, goals, and objectives and other similar expressions concerning matters that are not historical
facts.
Forward-looking statements should not be read as a guarantee of future performance or results, and will not
necessarily be accurate indications of the times that, or by which, such performance or results will be achieved.
Forward-looking information, including expectations regarding operational and financial improvements and the
Corporation’s future performance or results are subject to risks and uncertainties that could cause actual
performance or results to differ materially from those expressed in the statement. Important factors, including risk
factors, could affect the Corporation’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 Corporation’s Annual Report on Form 10-
K for 2008, which was filed with the SEC on February 6, 2009. The Corporation 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).
Forward-looking statements speak only as of, and are based only upon information available on, the date the
statements were made. The Corporation assumes no obligation to update forward-looking information to reflect
actual results, changes in assumptions or changes in other factors affecting forward-looking information. If the
Corporation does update one or more forward-looking statements, no inference should be drawn that the
Corporation will make additional updates with respect thereto or with respect to other forward-looking statements.
References to our Web site are provided for convenience and, therefore, information on or available through the
Web site is not, and should not be deemed to be, incorporated by reference herein.