Union Pacific Corp. Subsidiaries
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This page was last updated on June 17, 2015.
On June 26, 1971, all non-railroad properties of the Union Pacific Railroad were transferred to Union Pacific Corporation. (Moody's, 1973 p. 511)
In 1971, to remove them from regulation by the federal Interstate Commerce Commission, the non-rail assets of Union Pacific Railroad were transferred to its parent company, Union Pacific Corporation. These included "Rocky Mountain Energy Company, a coal and uranium mining operation; Upland Industries Corporation, a real estate concern" and Champlain Petroleum Company. (New York Times, November 12, 1978)
(Additional research is needed in Union Pacific annual reports, and in Wall Street investment guides (Moody's, Poor's, etc.) to develop a history of non-railroad subsidiaries)
Union Pacific Corporation purchased Champlin Petroleum in September 1969. (Klein, page 48)
One source shows that Champlain Oil & Refining Company became Champlain Petroleum Company in 1964, when Union Pacific purchased control of the company. Ownership was transferred from Union Pacific Corporation to Union Pacific Resources in 1987. (OilTrash.com)
Rocky Mountain Energy
April 7, 1971
Union Pacific Corporation (parent company of Union Pacific Railroad) and Eastern Gas and Fuel Associates formed a new joint venture company, Rocky Mountain Associated Coal Corporation, to develop Union Pacific's low sulphur coal reserves. The joint company would "acquire from Rocky Mountain Energy Company, a Union Pacific subsidiary, the Reliance mine near Rock Springs, Wyoming." The joint company planned to expand the Reliance mine to 1.5 million tons per year capacity, and develop several additional mines nearby. (New York Times, April 7, 1971)
In 1974, Union Pacific Corporation combined its coal mining subsidiary, Rocky Mountain Energy, and its trona, uranium and other minerals mining subsidiary, Union Pacific Mining, into a single company that retained the Rocky Mountain Energy Company name. (Klein, page 49)
Union Pacific Resources Group (1987-2000)
May 3, 1987 -- The Union Pacific Corporation consolidated two subsidiaries, Champlin Petroleum and the Rocky Mountain Energy Company, into a single operating company called the Union Pacific Resources Group, Inc. It said the change would permit further cost and productivity improvements in the natural resource businesses. (New York Times, May 4, 1987)
Union Pacific’s sale of its refinery at Wilmington, California, to Ultramar, and the sale if its share of a joint venture in a Corpus Christi, Texas refinery to its partner PDV America in December 1988 marked Union Pacific’s exit from U.S. refining. (U. S. Energy Information Agency, Genealogy of Major Refiners)
In 1995, Union Pacific Corporation combined all of its natural resource operations (Champlin Petroleum and Rocky Mountain Energy) into the Union Pacific Resources Group. In October 1995, Union Pacific sold a 17 percent stake to the public in an IPO. (New York Times, October 9, 1995)
On October 15, 1996, Union Pacific Corporation spun off its remaining 83 percent stake in Union Pacific Resources Group. At the time, Union Pacific Resources owned 7.5 million acres of land in the western states that originally came to Union Pacific as mid-19th century land grants. (New York Times, November 17, 1996)
All of Union Pacific's oil and natural gas interests were spun off to Union Pacific Corp. shareholders as Union Pacific Resources on October 15, 1996. On October 17, 1995, Union Pacific Resources Group Inc. completed an initial public offering of approximately 17 percent (42.5 million shares) of its outstanding common stock, generating net proceeds of $844 million to UPRG. Prior to the IPO, the Company was a wholly owned subsidiary of Union Pacific Corporation. Concurrent with the IPO, UPC announced its intention to distribute the remaining 83 percent of the Common Stock to its shareholders as a dividend by means of a tax free distribution. In connection with the IPO, the Company paid a $1.62 billion dividend to UPC. For historical purposes, UPR accounting began on March 31, 1995. During July 1995 (?), UP sold 17 percent of UNR in an IPO, at a share price of $21 per share, and on October 15, 1996, the remaining 83 percent of shares of UPR common stock were issued to Union Pacific Corp. shareholders on a .85 UPR shares to each share of UP stock. UNR shares were valued at $27.
The following comes from Union Pacific Resources Group Inc., SEC Form 10-K, dated March 21, 1997:
Union Pacific Resources Group Inc., a Utah corporation (the "Company"), is engaged primarily in the exploration for and the development and production of natural gas, natural gas liquids and crude oil in several major producing basins in the United States and Canada. The Company emphasizes natural gas in its exploration and production activities and also owns and operates significant assets, in proximity to its principal producing properties, dedicated to "gas value chain" activities, which consist of the gathering, processing, transportation and marketing of natural gas and natural gas liquids. The Company, through its wholly owned subsidiary, Union Pacific Fuels, Inc. ("UP Fuels"), markets approximately 72% of the Company's natural gas, 88% of its crude oil and 96% of its natural gas liquids, together with significant volumes of natural gas, natural gas liquids and crude oil produced by others. In addition, the Company engages in the hard minerals business through non-operated joint venture and royalty interests in several coal and trona (natural soda ash) mines located on lands within and adjacent to its Land Grant holdings in Wyoming. Over 90% of the Company's revenues, assets and reserves are generated or located in the United States.
In October 1995, the Company sold 42.5 million shares of its common stock in an initial public offering (the "Offering"). The Company's stock is traded on the New York Stock Exchange under the symbol "UPR." Prior to completion of the Offering, the Company was wholly owned by Union Pacific Corporation, a Utah corporation ("UPC"). Upon completion of the Offering and until October 15, 1996, UPC owned approximately 83% of the Company's outstanding common stock. Concurrent with the Offering, UPC announced its intention to distribute its remaining ownership interest in the Company to its shareholders as a dividend by means of a tax-free distribution (the "Distribution"). On October 15, 1996, the Distribution was consummated.
UPC acquired Champlin Petroleum Company ("Champlin") in 1970 to manage the exploitation of its oil and gas operations on the Land Grant. The Land Grant consists of land granted by the Federal government to a predecessor of UPC in the mid-1800s which passes through the states of Colorado and Wyoming and into Utah and intersects several highly productive oil and gas basins. In the Land Grant Area, the Company has fee ownership of the mineral rights under approximately 7.9 million acres constituting the initial Land Grant and controls the mineral rights under approximately 700,000 additional acres. In 1971, UPC combined its own oil and gas operations with those of Champlin. In 1987, the Champlin name was changed to Union Pacific Resources Company ("UPRC") and UPRC also became responsible for managing UPC's hard mineral assets.
In June 1997, Union Pacific Resources was reported as being the largest domestic driller of oil and gas, for the past five years. (New York Times, June 24, 1997)
In December 1997, a list of subsidiaries of Union Pacific Resources Group, Inc., included Resources Holding, Inc., which in turn, among many others, included Union Pacific Resources Company, which in turn, among many others, included Union Pacific Resources Inc., and Rocky Mountain Energy Company. Also among the companies managed by Resources Holding, Inc., was Union Pacific Realty Company, which in turn included Upland Industries Corporation and Union Pacific Land Resources Corporation. These last two real estate companies date from the earliest days of Union Pacific Corporation in 1969. (Union Pacific Resources Group Inc., SEC Form 10-K, dated December 31, 1997)
Summary of assets sold to Duke Energy - (from State of Wyoming, Supreme Court, Opinions, April 2001):
At the beginning of 1998, the business functions of UPR were divided into what were called business units. Those business units organized into the separate areas of "Exploration and Production," "Minerals," and the "GPM Business" (for Gathering, Processing and Marketing). The GPM Business was also commonly referred to as UP Fuels, and included virtually all of the gas gathering, processing and marketing assets of UPR. At that time, UP Fuels was the seventh largest processor of natural gas in the United States, and owned or managed interests in twenty natural gas processing facilities located in six different states. This processing capacity was supported by more than four thousand miles of gathering pipelines. UP Fuels also owned or managed interests in a number of natural gas liquids fractionation plants and pipelines. UP Fuels was one of the leading United States marketers of both natural gas and natural gas liquids. As the marketing entity for UPR's natural gas and natural gas liquids, UP Fuels was a party to thousands of marketing and transportation contracts directly pertaining to the GPM Business.
In April of 1998, the UPR Board of Directors approved a deleveraging plan which included a recommendation to sell the GPM Business. This plan was announced to the public on April 27, 1998. Accordingly, UPR decided to sell UP Fuels as a separate corporate unit and to reorganize its business structure and place all GPM Business assets under one company to conform actual ownership with business operations. This reorganization ultimately resulted in all GPM assets being placed under the corporate umbrella of Union Pacific Fuels, Inc.
In June and July 1998, UPR began to seek buyers for the UP Fuels and sought bids for the stock of the entity which would ultimately hold the UP Fuels assets. On November 20, 1998, UPR agreed to sell Union Pacific Fuels, Inc., to Duke Energy Field Services, Inc.
Union Pacific Resources Troubles -- (from Motley Fool, Daily Trouble, Friday, January 8, 1999):
One that has found trouble is the largest driller in the country, Union Pacific Resources. A spin-off from railroad titan Union Pacific, the stock has been a real train wreck over the past two years (1997-1999), falling from above $31 a share in early 1997 to around $9 a share as of this writing (in 1999).
To stimulate railroad growth in the West, the Pacific Railroad Act of 1862 granted large chunks of western land for those attempting to lay railroad tracks across the continent. Union Pacific, the Goliath of railroading west of the Mississippi, was given 7.9 million acres in Colorado, Utah, and Wyoming. It wasn't until a good 50 years later that Union Pacific started to mine this land for oil, gas, and coal in earnest.
After growing the business both organically and through several acquisitions, Union Pacific found itself a major player in the natural resources market. In 1995, the railroad packaged together and spun off to shareholders all of its assets in gas and natural resources as Union Pacific Resources.
After Union Pacific Resources found itself independent of the railroad, it went about looking for acquisitions. Its first major deal, a hostile offer for Pennzoil at more than double today's prices, was derailed at the last moment in 1997. Still hungry for mergers and acquisitions, the company successfully bought Canada-based Norcen for $3.5 billion last year. Late in 1998, Union Pacific Resources decided to sell its midstream gas processing operations to Duke Energy for $1.35 billion to pare down debt and concentrate on upstream gas exploration. The company is now one of the largest gas exploration companies on the continent.
Union Pacific Resources is a member of the S&P 500 index.
The Asian economic crisis, which started in late 1997, caused a drop-off in demand for oil that didn't really get felt in the market until mid-1998. Mix in this reduced demand with supply gushing in at record highs both domestically and from OPEC, and it only makes sense that prices have fallen across the board.
One warning sign with Union Pacific Resources that maybe should not have been overlooked was the company's excessively high level of debt (long-term debt to equity stands at a tall 2.8x). While the exploration activities can be shaved and operational costs trimmed during times of weak prices, debt represents a large fixed cost that has to be paid no matter what the market conditions. Debt alone is no reason to sell a company that has as many hard assets as Union Pacific Resources, but it does reduce the margin of error for equity investors.
The company's fortunes are tied intimately to oil and gas prices and, to truly know where Union Pacific Resources is headed, one has to know where the commodity markets are going. Just as the company's profits and margins have shrunk with the gas market, they are likely to rebound sharply if the price of gas bounces.
Union Pacific Resources is also in the midst of deleveraging itself by selling off non-core assets. The sale of the company's gas processing businesses to Duke Energy is in sync with this strategy, and more sales are expected to close in the near future. What should emerge is a company with greater financial flexibility that is concentrated in the business it knows best -- finding and drilling for natural gas.
Sale of part of Union Pacific Resources to Duke Energy -- (from Duke Energy news release):
DENVER (Feb. 22, 1999) -- The Federal Trade Commission has cleared the previously announced sale of Union Pacific Resources' (UPR) midstream natural gas business to Duke Energy Field Services Inc.
Duke Energy and UPR announced the $1.35 billion purchase/sale agreement Nov. 22, 1998. With the recent expiration of the waiting period required by the Hart-Scott-Rodino Antitrust Improvements Act, the parties expect the deal to close March 31.
Under the agreement, Duke Energy will purchase UPR's natural gas gathering, processing, fractionation and natural gas liquids pipeline business as well as UPR's natural gas and natural gas liquids marketing activities. Combined with current assets, these assets will make Duke Energy the nation's largest producer of natural gas liquids with production in excess of 200,000 barrels per day.
Union Pacific Resources is one of the nation's largest independent oil and gas exploration and production companies. Based in Fort Worth, Texas, UPR has been the number one domestic driller for the past seven years and was the number one gas producer in the state of Texas in 1997.
In April 2000, Union Pacific Resources Group was purchased by Anadarko Petroleum Corp. (Dallas Business Journal, April 3, 2000; Anadarko news release dated April 3, 2000)
Sale of Union Pacific Resources -- On July 14, 2000, Anadarko Petroleum announced the closing of its acquisition of Union Pacific Resources Group. Union Pacific became a wholly owned subsidiary of Anadarko. Union Pacific shareholders will receive 0.455 shares of Anadarko common stock for each share of UPR common stock they own. The merged company has 56 drilling rigs in operation in the United States, making it one of the most active domestic drillers. The resulting company has domestic exploration and production operations in Texas, Louisiana, Alaska, the Mid-Continent and the Rocky Mountain regions, and the shallow and deep waters of the Gulf of Mexico. (from Department of Energy, Energy Information Administration, July 21, 2000)
After being purchased by Anadarko, Union Pacific Resources Group, Inc. was renamed as Anadarko Holdings, Inc. (Anadarko news release dated September 9, 2004)
As of January 2012, Anadarko continued to own and manage oil, gas, and coal resources that originated with Union Pacific's original land grant obtained in the 1860s and 1870s. (BLM link) (PDF)
Overnite Transportation Company
Union Pacific purchased control of Overnite Transportation Company.
September 19, 1986 -- Union Pacific Will Acquire Overnite for $1.2 Billion -- Transportation giant Union Pacific Corp., which operates the nation's third-largest railroad, will acquire Overnite Transportation Co., a rapidly expanding trucking company, for $1.2 billion in cash, the companies said Thursday. (Los Angeles Times, September 19, 1986)
Union Pacific purchased Overnite Transportation Company in 1986 on the notion that Union Pacific could service its customers "end-to-end. " Carroll noted that the trucking business proved to be entirely different than rail with much more complex logistics and truck drivers with an independent mindset. Union Pacific was unable to mend these differences and would later spin off Overnite in 2003 for a price that was a third of what they had paid in 1986. (GuruFocus.com, Mergers and Acquisitions; 2 + 2 = 5, February 27, 2011)
On November 30, 2001, Union Pacific acquired 99.7 percent of the outstanding capital stock of Motor Cargo. The acquisition of Motor Cargo was completed on February 14, 2002, at which time the remaining 0.3 percent of outstanding capital stock of Motor Cargo was acquired. Immediately following the acquisition, Union Pacific transferred Motor Cargo to Overnite Holding as an indirect wholly-owned subsidiary. Overnite Holding owned all stock of Overnite Transportation. Overnite Transportation was reorganized as a new Overnite Corporation in July 2003. On November 5, 2003, Union Pacific sold all of its interest in Overnite Transportation to Overnite Holding, Inc., immediately prior to the IPO that took place the following day. (SEC Form 10K dated December 31, 2003)
The following comes from The Funding Universe:
Overnite Corporation is a leading interstate trucking company serving all 50 states, Canada, Mexico, Puerto Rico, and the U.S. Virgin Islands. It transports a variety of products including machinery, tobacco, textiles, plastics, electronics, and paper products. The company garners over 90 percent of revenues from its less-than-truckload (LTL) business; in an LTL shipment, Overnite fills its truck with freight from several different shippers. Its fleet includes 19,480 trailers, 5,299 tractors, and 114 straight trucks. The Overnite Trucking Corporation was acquired by Union Pacific Corporation in 1987, and Union Pacific set up Overnite Corporation as the holding company for Overnite Trucking and Motor Cargo Industries. Refocusing on its core rail business, Union Pacific spun off its Overnite trucking subsidiary in an initial public offering (IPO) in 2003.
Overnite was sold to Union Pacific Corporation for $1.2 billion, the largest amount ever paid for a trucking company. Union Pacific had made the purchase to combine Overnite's 4,000 trucks with its trailer-carrying railroad flatcars in a nationwide network. In 1993 Overnite established a special truck-rail division to link Canada and Mexico with the United States. Ford and Chrysler auto parts already had been moving in both directions in 48-foot containers trucked by Overnite and carried on double-stack Union Pacific trains. (FundingUniverse.com - Overnite Company History)
On May 16, 2005, Overnite was sold to UPS. (Los Angeles Times, May 17, 2005)
USPCI = United States Pollution Control, Inc.; established in 1968; later reorganized as USPCI, Inc.
In April 1988, after initially buying stock as early as June 1987, Union Pacific Corporation successfully completed an agreement to purchase full ownership of USPCI, an Oklahoma City-based hazardous-waste disposal company. The purchase price was reported as $415 million. (New York Times, June 9, 1987; April 5, 1988; Journal of Commerce, January 4, 1995)
Both Burlington Northern and Union Pacific saw a large potential for moving trash over their railroads to large so-called megafills that were being developed during the late 1980s and early 1990s. The potential market was severely limited by numerous environmental and "not in my back yard" movements at the local level that prevented successful permitting of these megafills. Also, Union Pacific Corporation allowed USPCI to operate as an independent company, which in-turn allowed USPCI to make traffic agreements with other railroads instead of Union Pacific Railroad.
In 1991, USPCI, under Union Pacific ownership, opened the hazardous waste disposal site at Clive, a siding in western Utah on UP's former Western Pacific mainline between Salt Lake City and Wendover. The cost to develop the site was reported as $200 million. (Journal of Commerce, January 4, 1995)
USPCI owned 60 pecent of ECDC Environmental, LC. (Union Pacific SEC filing, dated March 22, 1994)
On October 31, 1994, Union Pacific Corporation announced that it would sell its USPCI subsidiary to Laidlaw, Inc., for a reported amount of $225 million. (New York Times, November 1, 1994)
The sale of USPCI to Laidlaw was completed in January 3, 1995. The purchase was first announced on October 31, 1994. The purchase price was reported as $263 million. (New York Times, November 1, 1994; Journal of Commerce, January 4, 1995)
By 1998, Laidlaw was a subsidiary of Safety Kleen, Inc., which continued to show USPCI and ECDC as subsidiaries. (SECInfo.com)