NEW YORK (Standard & Poor's) Oct. 24, 2003--Union Pacific Corp. (UP; BBB/Positive/A-2) reported record quarterly revenues of $2.9 billion for the third-quarter of 2003, a 4% increase over the third quarter of 2002. However, increased expenses and operational challenges caused operating income to decline by 4%, to $592 million from $619 million. Standard & Poor's Ratings Services said that the announcement does not affect its ratings or outlook on the company. The revenue increase was driven by strong demand in the agricultural, coal, and industrial segment as well as improved pricing and fuel surcharges. However, operating income was adversely affected by increased expenses, partly due to inefficiencies caused by understaffing and increased maintenance work. The operating ratio (operating expenses, including
