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UP lone “revenue adequate” railroad for 2010

Posted By rob On November 4, 2011 @ 5:32 am In News,Recent Updates,Washington | Comments Disabled

WASHINGTON – The U.S. Surface Transportation Board has determined that only one major railroad – Union Pacific – was “revenue adequate” in calendar year 2010.

A railroad is considered “revenue adequate” if it achieves a rate of return on net investment equal to at least the current cost of capital for the railroad industry.

Revenue adequacy determines long-term financial sustainability – the ability to pay investors competitive returns as well as covering the cost of efficient operation, which includes obtaining capital for new equipment; to maintain existing track, bridges, signal systems and other capital assets; and to fund capacity expansion.

For 2010, the STB concluded that the current cost of capital for the railroad industry was 11.03 percent, and only Union Pacific achieved a rate of return equal to or exceeding that percentage. No railroad was found to be “revenue adequate” for calendar year 2009.

For 2010, the STB determined that Union Pacific achieved a rate of return on net investment of 11.54 percent; Norfolk Southern, 10.96 percent; CSX, 10.85 percent; Kansas City Southern, 9.77 percent; BNSF, 9.22 percent; Canadian National U.S. affiliates, 9.21 percent; and Canadian Pacific U.S. affiliates, 8.01 percent.


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