OMAHA, Neb., Jan. 23, 2020 /PRNewswire/ -- Union Pacific
Corporation (NYSE: UNP) today reported 2019 fourth quarter net
income of $1.4 billion, or
$2.02 per diluted share. This
compares to $1.6 billion, or
$2.12 per diluted share, in the
fourth quarter 2018.
"Given the challenging volume environment, we leveraged strong
productivity to deliver solid financial results including the third
consecutive quarter with an operating ratio below 60 percent," said
Lance Fritz, Union Pacific chairman,
president and chief executive officer. "The work our employees are
doing as part of Unified Plan 2020 has been transformational and
key to providing a safe, reliable and consistent service product
for our customers."
Fourth Quarter Summary
Operating revenue of $5.2 billion
was down 9 percent in fourth quarter 2019, compared to fourth
quarter 2018. Fourth quarter business volumes, as measured by total
revenue carloads, decreased 11 percent compared to 2018. Industrial
volumes were flat compared to 2018, while agricultural products,
premium and energy shipments declined. In addition:
- Quarterly freight revenue declined 10 percent, compared to
fourth quarter 2018, as core pricing gains and a positive business
mix were offset by lower volumes and decreased fuel surcharge
revenue.
- Union Pacific's 59.7 percent operating ratio represented a
fourth quarter record and the third consecutive quarter below 60
percent, improving 1.9 points compared to fourth quarter 2018.The
$2.16 per gallon average quarterly
diesel fuel price in fourth quarter 2019 was 7 percent lower than
fourth quarter 2018.
- Quarterly freight car velocity was 220 daily miles per car, a 5
percent improvement compared to fourth quarter 2018.
- Terminal dwell was 23.3 hours, a 13 percent improvement
compared to fourth quarter 2018.
- The Company repurchased 3.6 million shares in fourth quarter
2019 at an aggregate cost of $599
million.
Summary of Fourth Quarter Freight Revenues
- Industrial flat
- Agricultural Products down 2 percent
- Premium down 14 percent
- Energy down 25 percent
2019 Full Year Summary
For the full year 2019, Union Pacific reported net income of
$5.9 billion or $8.38 per diluted share, which represents a 1
percent decrease and 6 percent increase, respectively, when
compared to 2018.
Operating revenue totaled $21.7
billion compared to $22.8
billion in 2018. Operating income totaled $8.6 billion, which was flat compared to
2018. In addition:
- Freight revenue totaled $20.2
billion, a 5 percent decrease compared to 2018.
Carloadings were down 6 percent versus 2018, with growth in
industrial volumes more than offset by fewer agricultural products,
premium and energy shipments.
- Union Pacific's operating ratio improved to a best ever 60.6
percent, 2.1 points lower than 2018.
- Average diesel fuel prices decreased 7 percent to $2.13 per gallon in 2019 from $2.29 per gallon in 2018.Fuel consumption rate,
measured in gallons of fuel per thousand gross ton miles, improved
2% in 2019 compared to 2018.
- Union Pacific recognized a payroll tax refund of $78.5 million, along with associated interest
income of $31.3 million in 2019.
- Freight car velocity was 208 daily miles per car, a 6 percent
improvement compared to full year 2018.
- Terminal dwell was 24.8 hours, a 17 percent improvement
compared to full year 2018.
- Union Pacific's reportable personal injury rate of 0.90
incidents per 200,000 employee hours increased 11 percent compared
to full year 2018.
- Union Pacific's capital program in 2019 totaled $3.2 billion.
- Union Pacific repurchased 35 million shares in 2019 at an
aggregate cost of $5.8 billion.
2020 Outlook
"While we are pleased with our progress in providing a highly
consistent, reliable and efficient service product for our
customers, we must improve our safety results," Fritz said. "As
always, we remain focused on growing the business and improving
margins while driving shareholder returns."
Fourth Quarter 2019 Earnings Conference Call
Union Pacific will webcast its fourth quarter 2019 earnings
release presentation live at www.up.com/investor and via
teleconference on Thursday, January 23,
2020 at 8:45 a.m. Eastern
Time. Alternatively, the webcast can be accessed directly
through the following link. Participants may join the conference
call by dialing 877/407-8293 (or for international participants,
201/689-8349).
ABOUT UNION PACIFIC
Union Pacific Railroad is the principal operating company of
Union Pacific Corporation (NYSE: UNP). One of America's most
recognized companies, Union Pacific Railroad connects 23 states in
the western two-thirds of the country by rail, providing a critical
link in the global supply chain. The railroad's diversified
business mix is classified into its Agricultural Products, Energy,
Industrial and Premium business groups. Union Pacific serves many
of the fastest-growing U.S. population centers, operates from all
major West Coast and Gulf Coast ports to eastern gateways, connects
with Canada's rail systems and is
the only railroad serving all six major Mexico gateways. Union Pacific provides value
to its roughly 10,000 customers by delivering products in a safe,
reliable, fuel-efficient and environmentally responsible
manner.
Supplemental financial information is attached.
This presentation and related materials contain statements
about the Company's future that are not statements of historical
fact, including specifically the statements regarding the Company's
expectations with respect to economic conditions and demand levels
and its ability to improve network performance and customer
service. 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 Company'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 Company'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 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 2018, which was filed with the SEC on February 8, 2019. 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).
Forward-looking statements speak only as of, and are based
only upon information available on, the date the statements were
made. The Company 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 Company does update one or more
forward-looking statements, no inference should be drawn that the
Company will make additional updates with respect thereto or with
respect to other forward-looking statements. References to
our website are provided for convenience and, therefore,
information on or available through the website is not, and should
not be deemed to be, incorporated by reference herein.
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Condensed
Consolidated Statements of Income (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions,
Except Per Share Amounts and Percentages,
|
4th
Quarter
|
|
Full
Year
|
For the
Periods Ended December 31,
|
2019
|
2018
|
%
|
|
|
2019
|
2018
|
%
|
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight
revenues
|
$
|
4,851
|
$
|
5,387
|
(10)
|
%
|
|
$
|
20,243
|
$
|
21,384
|
(5)
|
%
|
Other
|
|
361
|
|
370
|
(2)
|
|
|
|
1,465
|
|
1,448
|
1
|
|
Total operating
revenues
|
|
5,212
|
|
5,757
|
(9)
|
|
|
|
21,708
|
|
22,832
|
(5)
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
1,049
|
|
1,280
|
(18)
|
|
|
|
4,533
|
|
5,056
|
(10)
|
|
Purchased services and
materials
|
|
531
|
|
582
|
(9)
|
|
|
|
2,254
|
|
2,443
|
(8)
|
|
Depreciation
|
|
559
|
|
555
|
1
|
|
|
|
2,216
|
|
2,191
|
1
|
|
Fuel
|
|
512
|
|
640
|
(20)
|
|
|
|
2,107
|
|
2,531
|
(17)
|
|
Equipment and other
rents
|
|
230
|
|
269
|
(14)
|
|
|
|
984
|
|
1,072
|
(8)
|
|
Other
|
|
231
|
|
221
|
5
|
|
|
|
1,060
|
|
1,022
|
4
|
|
Total operating
expenses
|
|
3,112
|
|
3,547
|
(12)
|
|
|
|
13,154
|
|
14,315
|
(8)
|
|
Operating
Income
|
|
2,100
|
|
2,210
|
(5)
|
|
|
|
8,554
|
|
8,517
|
-
|
|
Other
income
|
|
56
|
|
46
|
22
|
|
|
|
243
|
|
94
|
F
|
|
Interest
expense
|
|
(278)
|
|
(240)
|
16
|
|
|
|
(1,050)
|
|
(870)
|
21
|
|
Income before
income taxes
|
|
1,878
|
|
2,016
|
(7)
|
|
|
|
7,747
|
|
7,741
|
-
|
|
Income
taxes
|
|
(475)
|
|
(462)
|
3
|
|
|
|
(1,828)
|
|
(1,775)
|
3
|
|
Net
Income
|
$
|
1,403
|
$
|
1,554
|
(10)
|
|
|
$
|
5,919
|
$
|
5,966
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share and
Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
|
2.03
|
$
|
2.13
|
(5)
|
%
|
|
$
|
8.41
|
$
|
7.95
|
6
|
%
|
Earnings per share -
diluted
|
$
|
2.02
|
$
|
2.12
|
(5)
|
|
|
$
|
8.38
|
$
|
7.91
|
6
|
|
Weighted average
number of shares - basic
|
|
692.2
|
|
729.4
|
(5)
|
|
|
|
703.5
|
|
750.9
|
(6)
|
|
Weighted average
number of shares - diluted
|
|
694.9
|
|
732.9
|
(5)
|
|
|
|
706.1
|
|
754.3
|
(6)
|
|
Dividends declared per
share
|
$
|
0.97
|
$
|
0.80
|
21
|
|
|
$
|
3.70
|
$
|
3.06
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Ratio
|
|
59.7%
|
|
61.6%
|
(1.9)
|
pts
|
|
|
60.6%
|
|
62.7%
|
(2.1)
|
pts
|
Effective
Tax Rate
|
|
25.3%
|
|
22.9%
|
2.4
|
|
|
|
23.6%
|
|
22.9%
|
0.7
|
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Freight Revenues
Statistics (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4th
Quarter
|
|
Full
Year
|
For the
Periods Ended December 31,
|
2019
|
2018
|
%
|
|
|
2019
|
2018
|
%
|
|
Freight
Revenues (Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
1,099
|
$
|
1,124
|
(2)
|
%
|
|
$
|
4,444
|
$
|
4,469
|
(1)
|
%
|
Energy
|
|
838
|
|
1,110
|
(25)
|
|
|
|
3,761
|
|
4,608
|
(18)
|
|
Industrial
|
|
1,407
|
|
1,405
|
-
|
|
|
|
5,796
|
|
5,679
|
2
|
|
Premium
|
|
1,507
|
|
1,748
|
(14)
|
|
|
|
6,242
|
|
6,628
|
(6)
|
|
Total
|
$
|
4,851
|
$
|
5,387
|
(10)
|
%
|
|
$
|
20,243
|
$
|
21,384
|
(5)
|
%
|
Revenue
Carloads (Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
|
270
|
|
275
|
(2)
|
%
|
|
|
1,091
|
|
1,124
|
(3)
|
%
|
Energy
|
|
325
|
|
404
|
(20)
|
|
|
|
1,408
|
|
1,650
|
(15)
|
|
Industrial
|
|
431
|
|
431
|
-
|
|
|
|
1,787
|
|
1,752
|
2
|
|
Premium
[a]
|
|
967
|
|
1,132
|
(15)
|
|
|
|
4,060
|
|
4,382
|
(7)
|
|
Total
|
|
1,993
|
|
2,242
|
(11)
|
%
|
|
|
8,346
|
|
8,908
|
(6)
|
%
|
Average
Revenue per Car
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
4,070
|
$
|
4,079
|
-
|
%
|
|
$
|
4,072
|
$
|
3,973
|
2
|
%
|
Energy
|
|
2,573
|
|
2,748
|
(6)
|
|
|
|
2,671
|
|
2,793
|
(4)
|
|
Industrial
|
|
3,268
|
|
3,258
|
-
|
|
|
|
3,244
|
|
3,241
|
-
|
|
Premium
|
|
1,560
|
|
1,546
|
1
|
|
|
|
1,538
|
|
1,513
|
2
|
|
Average
|
$
|
2,435
|
$
|
2,403
|
1
|
%
|
|
$
|
2,425
|
$
|
2,400
|
1
|
%
|
|
|
[a]
|
For intermodal
shipments, each container or trailer equals one carload.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Condensed
Consolidated Statements of Financial Position
(unaudited)
|
|
|
|
|
|
|
Dec.
31,
|
Dec.
31,
|
Millions,
Except Percentages
|
2019
|
2018
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
831
|
$
|
1,273
|
Short-term
investments
|
|
60
|
|
60
|
Other current
assets
|
|
2,568
|
|
2,830
|
Investments
|
|
2,050
|
|
1,912
|
Net
properties
|
|
53,916
|
|
52,679
|
Operating lease
assets
|
|
1,812
|
|
-
|
Other
assets
|
|
436
|
|
393
|
Total
assets
|
$
|
61,673
|
$
|
59,147
|
|
|
|
|
|
Liabilities
and Common Shareholders' Equity
|
|
|
|
|
Debt due within one
year
|
$
|
1,257
|
$
|
1,466
|
Other current
liabilities
|
|
3,094
|
|
3,160
|
Debt due after one
year
|
|
23,943
|
|
20,925
|
Operating lease
liabilities
|
|
1,471
|
|
-
|
Deferred income
taxes
|
|
11,992
|
|
11,302
|
Other long-term
liabilities
|
|
1,788
|
|
1,871
|
Total
liabilities
|
|
43,545
|
|
38,724
|
Total common
shareholders' equity
|
|
18,128
|
|
20,423
|
Total
liabilities and common shareholders' equity
|
$
|
61,673
|
$
|
59,147
|
|
|
|
|
|
Return on
Average Common Shareholders' Equity
|
|
30.7%
|
|
26.4%
|
Return on
Invested Capital as Adjusted (ROIC)*
|
|
15.0%
|
|
15.1%
|
|
|
*
|
ROIC is a non-GAAP
measure; however, management believes that it is an important
measure in evaluating the efficiency and effectiveness of our
long-term capital investments. See page 9 for a reconciliation to
GAAP.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Condensed
Consolidated Statements of Cash Flows (unaudited)
|
|
|
|
|
|
|
Millions,
|
Full
Year
|
For the
Periods Ended December 31,
|
2019
|
2018
|
Operating
Activities
|
|
|
|
|
Net income
|
$
|
5,919
|
$
|
5,966
|
Depreciation
|
|
2,216
|
|
2,191
|
Deferred income
taxes
|
|
566
|
|
338
|
Other - net
|
|
(92)
|
|
191
|
Cash provided
by operating activities
|
|
8,609
|
|
8,686
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
Capital
investments*
|
|
(3,453)
|
|
(3,437)
|
Maturities of
short-term investments
|
|
130
|
|
90
|
Purchases of
short-term investments
|
|
(115)
|
|
(90)
|
Other - net
|
|
3
|
|
26
|
Cash used in
investing activities
|
|
(3,435)
|
|
(3,411)
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
Share repurchase
programs
|
|
(5,804)
|
|
(8,225)
|
Debt issued
|
|
3,986
|
|
6,892
|
Dividends
paid
|
|
(2,598)
|
|
(2,299)
|
Debt repaid
|
|
(817)
|
|
(1,736)
|
Debt
exchange
|
|
(387)
|
|
-
|
Net issuance of
commercial paper
|
|
(6)
|
|
194
|
Other - net
|
|
(20)
|
|
(48)
|
Cash used in
financing activities
|
|
(5,646)
|
|
(5,222)
|
|
|
|
|
|
Net Change
in Cash, Cash Equivalents and Restricted Cash
|
|
(472)
|
|
53
|
Cash, cash
equivalents and restricted cash at beginning of year
|
|
1,328
|
|
1,275
|
Cash, Cash
Equivalents and Restricted Cash at End of Year
|
$
|
856
|
$
|
1,328
|
|
|
|
|
|
Free Cash
Flow**
|
|
|
|
|
Cash provided by
operating activities
|
$
|
8,609
|
$
|
8,686
|
Cash used in investing
activities
|
|
(3,435)
|
|
(3,411)
|
Dividends
paid
|
|
(2,598)
|
|
(2,299)
|
Free cash
flow
|
$
|
2,576
|
$
|
2,976
|
|
|
*
|
Capital investments
include locomotive and freight car early lease buyouts of $290
million in both 2019 and 2018.
|
|
|
**
|
Free cash flow is a
non-GAAP measure; however, we believe this measure is important to
management and investors in evaluating our financial performance
and measures our ability to generate cash without additional
external financing.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Operating and
Performance Statistics (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
4th
Quarter
|
|
Full
Year
|
For the
Periods Ended December 31,
|
2019
|
2018
|
%
|
|
|
2019
|
2018
|
%
|
|
Operating/Performance
Statistics
|
|
|
|
|
|
|
|
|
|
Freight car velocity
(daily miles per car) [a]
|
220
|
209
|
5
|
%
|
|
208
|
196
|
6
|
%
|
Average train speed
(miles per hour) [a] *
|
26.2
|
26.0
|
1
|
|
|
25.1
|
26.1
|
(4)
|
|
Average terminal dwell
time (hours) [a] *
|
23.3
|
26.9
|
(13)
|
|
|
24.8
|
29.8
|
(17)
|
|
Locomotive
productivity (GTMs per horsepower day)
|
126
|
111
|
14
|
|
|
120
|
106
|
13
|
|
Gross ton-miles (GTMs)
(millions)
|
200,801
|
230,537
|
(13)
|
|
|
846,616
|
928,587
|
(9)
|
|
Workforce productivity
(car miles per employee)
|
874
|
840
|
4
|
|
|
857
|
839
|
2
|
|
Employees
(average)
|
34,563
|
41,696
|
(17)
|
|
|
37,483
|
41,967
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
Locomotive
Fuel Statistics
|
|
|
|
|
|
|
|
|
|
Average fuel price per
gallon consumed
|
$
2.16
|
$ 2.33
|
(7)
|
%
|
|
$
2.13
|
$ 2.29
|
(7)
|
%
|
Fuel consumed in
gallons (millions)
|
228
|
265
|
(14)
|
|
|
953
|
1,068
|
(11)
|
|
Fuel consumption
rate**
|
1.140
|
1.148
|
(1)
|
|
|
1.126
|
1.150
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
Ton-Miles (Millions)
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
23,560
|
24,767
|
(5)
|
%
|
|
96,365
|
101,759
|
(5)
|
%
|
Energy
|
29,483
|
40,891
|
(28)
|
|
|
134,751
|
170,045
|
(21)
|
|
Industrial
|
24,237
|
24,530
|
(1)
|
|
|
99,171
|
100,469
|
(1)
|
|
Premium
|
22,652
|
25,420
|
(11)
|
|
|
93,146
|
101,684
|
(8)
|
|
Total
|
99,932
|
115,608
|
(14)
|
%
|
|
423,433
|
473,957
|
(11)
|
%
|
|
|
[a]
|
Prior years have been
recast to conform to the current year presentation.
|
|
|
*
|
Surface
Transportation Board reported performance
measures.
|
|
|
**
|
Fuel consumption is
computed as follows: gallons of fuel consumed divided by gross
ton-miles in thousands.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Condensed
Consolidated Statements of Income (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
Millions,
Except Per Share Amounts and Percentages,
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
Full
Year
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
Freight
revenues
|
$
|
5,010
|
$
|
5,236
|
$
|
5,146
|
$
|
4,851
|
$
|
20,243
|
Other
|
|
374
|
|
360
|
|
370
|
|
361
|
|
1,465
|
Total operating
revenues
|
|
5,384
|
|
5,596
|
|
5,516
|
|
5,212
|
|
21,708
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
1,205
|
|
1,145
|
|
1,134
|
|
1,049
|
|
4,533
|
Purchased services and
materials
|
|
576
|
|
573
|
|
574
|
|
531
|
|
2,254
|
Depreciation
|
|
549
|
|
551
|
|
557
|
|
559
|
|
2,216
|
Fuel
|
|
531
|
|
560
|
|
504
|
|
512
|
|
2,107
|
Equipment and other
rents
|
|
258
|
|
260
|
|
236
|
|
230
|
|
984
|
Other
|
|
305
|
|
247
|
|
277
|
|
231
|
|
1,060
|
Total operating
expenses
|
|
3,424
|
|
3,336
|
|
3,282
|
|
3,112
|
|
13,154
|
Operating
Income
|
|
1,960
|
|
2,260
|
|
2,234
|
|
2,100
|
|
8,554
|
Other
income
|
|
77
|
|
57
|
|
53
|
|
56
|
|
243
|
Interest
expense
|
|
(247)
|
|
(259)
|
|
(266)
|
|
(278)
|
|
(1,050)
|
Income before
income taxes
|
|
1,790
|
|
2,058
|
|
2,021
|
|
1,878
|
|
7,747
|
Income
taxes
|
|
(399)
|
|
(488)
|
|
(466)
|
|
(475)
|
|
(1,828)
|
Net
Income
|
$
|
1,391
|
$
|
1,570
|
$
|
1,555
|
$
|
1,403
|
$
|
5,919
|
|
|
|
|
|
|
|
|
|
|
|
Share and
Per Share
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
|
1.94
|
$
|
2.23
|
$
|
2.22
|
$
|
2.03
|
$
|
8.41
|
Earnings per share -
diluted
|
$
|
1.93
|
$
|
2.22
|
$
|
2.22
|
$
|
2.02
|
$
|
8.38
|
Weighted average
number of shares - basic
|
|
716.8
|
|
705.5
|
|
699.3
|
|
692.2
|
|
703.5
|
Weighted average
number of shares - diluted
|
|
719.5
|
|
708.0
|
|
701.9
|
|
694.9
|
|
706.1
|
Dividends declared per
share
|
$
|
0.88
|
$
|
0.88
|
$
|
0.97
|
$
|
0.97
|
$
|
3.70
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Ratio
|
|
63.6%
|
|
59.6%
|
|
59.5%
|
|
59.7%
|
|
60.6%
|
Effective
Tax Rate
|
|
22.3%
|
|
23.7%
|
|
23.1%
|
|
25.3%
|
|
23.6%
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Freight Revenues
Statistics (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
Full
Year
|
Freight
Revenues (Millions)
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
1,067
|
$
|
1,155
|
$
|
1,123
|
$
|
1,099
|
$
|
4,444
|
Energy
|
|
982
|
|
966
|
|
975
|
|
838
|
|
3,761
|
Industrial
|
|
1,410
|
|
1,494
|
|
1,485
|
|
1,407
|
|
5,796
|
Premium
|
|
1,551
|
|
1,621
|
|
1,563
|
|
1,507
|
|
6,242
|
Total
|
$
|
5,010
|
$
|
5,236
|
$
|
5,146
|
$
|
4,851
|
$
|
20,243
|
Revenue
Carloads (Thousands)
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
|
259
|
|
284
|
|
278
|
|
270
|
|
1,091
|
Energy
|
|
358
|
|
351
|
|
374
|
|
325
|
|
1,408
|
Industrial
|
|
429
|
|
460
|
|
467
|
|
431
|
|
1,787
|
Premium
[a]
|
|
1,041
|
|
1,042
|
|
1,010
|
|
967
|
|
4,060
|
Total
|
|
2,087
|
|
2,137
|
|
2,129
|
|
1,993
|
|
8,346
|
Average
Revenue per Car
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
4,123
|
$
|
4,057
|
$
|
4,042
|
$
|
4,070
|
$
|
4,072
|
Energy
|
|
2,740
|
|
2,753
|
|
2,613
|
|
2,573
|
|
2,671
|
Industrial
|
|
3,292
|
|
3,242
|
|
3,178
|
|
3,268
|
|
3,244
|
Premium
|
|
1,489
|
|
1,557
|
|
1,546
|
|
1,560
|
|
1,538
|
Average
|
$
|
2,401
|
$
|
2,450
|
$
|
2,417
|
$
|
2,435
|
$
|
2,425
|
|
|
[a]
|
For intermodal
shipments, each container or trailer equals one carload.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Non-GAAP Measures
Reconciliation to GAAP
|
|
Adjusted
Debt / Adjusted EBITDA*
|
|
|
|
|
|
|
Millions, Except
Ratios
|
Dec.
31,
|
Dec.
31,
|
Dec.
31,
|
for the Twelve
Months Ended
|
2019
|
2018
|
2017
|
Net
income
|
$
|
5,919
|
$
|
5,966
|
$
|
10,712
|
Add:
|
|
|
|
|
|
|
Income tax
expense/(benefit)
|
|
1,828
|
|
1,775
|
|
(3,080)
|
Depreciation
|
|
2,216
|
|
2,191
|
|
2,105
|
Interest
expense
|
|
1,050
|
|
870
|
|
719
|
EBITDA
|
$
|
11,013
|
$
|
10,802
|
$
|
10,456
|
Adjustments:
|
|
|
|
|
|
|
Other
income
|
|
(243)
|
|
(94)
|
|
(245)
|
Interest on
operating lease liabilities**
|
|
68
|
|
84
|
|
98
|
Adjusted
EBITDA
|
$
|
10,838
|
$
|
10,792
|
$
|
10,309
|
Debt
|
$
|
25,200
|
$
|
22,391
|
$
|
16,944
|
Operating lease
liabilities***
|
|
1,833
|
|
2,271
|
|
2,140
|
Unfunded
pension and OPEB, net of taxes of $124, $135, and $238
|
|
400
|
|
456
|
|
396
|
Adjusted
debt
|
$
|
27,433
|
$
|
25,118
|
$
|
19,480
|
Adjusted debt /
Adjusted EBITDA
|
|
2.5
|
|
2.3
|
|
1.9
|
|
|
*
|
Total debt plus
operating lease liabilities plus after-tax unfunded pension and
OPEB obligation divided by net income plus income tax expense,
depreciation, amortization, interest expense and adjustments for
other income and interest on operating lease liabilities. Adjusted
debt to adjusted EBITDA (earnings before interest, taxes,
depreciation, amortization, other income and interest on operating
lease liabilities) is considered a non-GAAP financial measure by
SEC Regulation G and Item 10 of SEC Regulation S-K and may not be
defined and calculated by other companies in the same manner. We
believe this measure is important to management and investors in
evaluating the Company's ability to sustain given debt levels
(including leases) with the cash generated from operations. In
addition, a comparable measure is used by rating agencies when
reviewing the Company's credit rating. Adjusted debt to Adjusted
EBITDA should be considered in addition to, rather than as a
substitute for, net income. The table above provides
reconciliations from net income to adjusted debt to adjusted
EBITDA. At December 31, 2019 and December 31, 2018, the incremental
borrowing rate on operating leases was 3.7%. At December 31, 2017,
operating leases were discounted using our effective interest rate
on debt of 4.6%.
|
|
|
**
|
Represents the
hypothetical interest expense we would incur (using the incremental
borrowing rate) if the property under our operating leases were
owned or accounted for as finance leases.
|
|
|
***
|
Effective January 1,
2019, the Company adopted Accounting Standards Update No. 2016-02
(ASU 2016-02), Leases. ASU 2016-02 requires companies to
recognize lease assets and lease liabilities on the balance
sheet. Prior to adoption, the present value of operating
leases was used in this calculation.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Non-GAAP Measures
Reconciliation to GAAP
|
|
|
|
|
|
|
|
Return on
Average Common Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions,
Except Percentages
|
2019
|
2018
|
2017
|
Net
income
|
$
|
5,919
|
$
|
5,966
|
$
|
10,712
|
Average
equity
|
$
|
19,276
|
$
|
22,640
|
$
|
22,394
|
Return on
average common shareholders' equity
|
|
30.7%
|
|
26.4%
|
|
47.8%
|
|
|
|
|
|
|
|
Return on
Invested Capital as Adjusted (ROIC)*
|
|
|
|
|
|
|
|
|
|
|
Millions,
Except Percentages
|
2019
|
2018
|
2017
|
Net
income
|
$
|
5,919
|
$
|
5,966
|
$
|
10,712
|
Interest
expense
|
|
1,050
|
|
870
|
|
719
|
Interest on
average operating lease liabilities
|
|
76
|
|
82
|
|
105
|
Taxes on
interest
|
|
(266)
|
|
(218)
|
|
(309)
|
Net operating
profit after taxes as adjusted
|
$
|
6,779
|
$
|
6,700
|
$
|
11,227
|
Average
equity
|
$
|
19,276
|
$
|
22,640
|
$
|
22,394
|
Average
debt
|
|
23,796
|
|
19,668
|
|
15,976
|
Average
operating lease liabilities
|
|
2,052
|
|
2,206
|
|
2,288
|
Average
invested capital as adjusted
|
$
|
45,124
|
$
|
44,514
|
$
|
40,658
|
Return on
invested capital as adjusted
|
|
15.0%
|
|
15.1%
|
|
27.6%
|
|
|
*
|
ROIC is considered a
non-GAAP financial measure by SEC Regulation G and Item 10 of SEC
Regulation S-K, and may not be defined and calculated by other
companies in the same manner. We believe this measure is important
to management and investors in evaluating the efficiency and
effectiveness of our long-term capital investments. In addition, we
currently use ROIC as a performance criteria in determining certain
elements of equity compensation for our executives. ROIC should be
considered in addition to, rather than as a substitute for, other
information provided in accordance with GAAP. The most comparable
GAAP measure is Return on Average Common Shareholders' Equity. The
tables above provide reconciliations from return on average common
shareholders' equity to ROIC. At December 31, 2019 and December 31,
2018, the incremental borrowing rate on operating leases was 3.7%.
At December 31, 2017, operating leases were discounted using our
effective interest rate on debt of 4.6%.
|
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SOURCE Union Pacific Corporation