OMAHA, Neb., April 23, 2020 /PRNewswire/ -- Union Pacific
Corporation (NYSE: UNP) today reported 2020 first quarter net
income of $1.5 billion, or
$2.15 per diluted share. This
compares to $1.4 billion, or
$1.93 per diluted share, in the first
quarter 2019.
"Against the backdrop of the emerging COVID-19 pandemic and a
challenging volume environment, we leveraged productivity to
deliver strong financial results, including an all time best
operating ratio of 59 percent," said Lance
Fritz, Union Pacific chairman, president and chief executive
officer. "We also made substantial improvement in employee safety,
which is a testament to our dedicated employees. Our rail network
has never run better, providing a safer, more reliable and
efficient service product to our customers."
First Quarter Summary
Operating revenue of $5.2 billion
was down 3 percent in first quarter 2020, compared to first quarter
2019. First quarter business volumes, as measured by total revenue
carloads, decreased 7 percent compared to 2019. Industrial volumes
increased compared to 2019, while bulk and premium shipments
declined. In addition:
- Quarterly freight revenue declined 3 percent, compared to first
quarter 2019, as positive business mix and core pricing gains were
offset by lower volumes and decreased fuel surcharge revenue.
- Union Pacific's 59 percent operating ratio represented a
quarterly record and the fourth consecutive quarter below 60
percent, improving 4.6 points compared to first quarter 2019.
|
Operating
Ratio
|
Earnings Per
Diluted Share
|
|
First Quarter
2019
|
63.6%
|
$1.93
|
|
2019 Payroll Tax
Refund
|
(0.8) pts
|
($0.05)
|
|
2019 Weather
Expense
|
0.8 pts
|
$0.05
|
|
Fuel
Impact
|
0.8 pts
|
$0.04
|
|
Core
Results
|
3.8 pts
|
$0.18
|
|
First Quarter
2020
|
59.0%
|
$2.15
|
- The $1.87 per gallon average
quarterly diesel fuel price in first quarter 2020 was 10 percent
lower than first quarter 2019.
- Fuel consumption rate, measured in gallons of fuel per thousand
gross ton-miles (GTMs), improved 5% compared to first quarter 2019,
achieving a first quarter record in 2020.
- Union Pacific's reportable personal injury rate of 0.80
incidents per 200,000 employee hours decreased 11 percent compared
to first quarter 2019.
- Quarterly freight car velocity was 209 daily miles per car, an
8 percent improvement compared to first quarter 2019.
- Quarterly locomotive productivity was 131 GTMs per horsepower
day, an 18 percent improvement compared to first quarter 2019.
- Average maximum train length was 8,396 feet, a 15 percent
increase compared to first quarter 2019.
- The Company repurchased 14.3 million shares in first quarter
2020 at an aggregate cost of $2.6
billion.
Summary of First Quarter Freight Revenues
- Industrial up 3 percent
- Bulk down 5 percent
- Premium down 6 percent
2020 Outlook
Union Pacific expects second quarter 2020 carload volumes to be
down around 25 percent, compared to the second quarter 2019.
Although the situation is fluid and highly uncertain, the Company
fully expects to maintain sufficient liquidity to sustain an
extended period of lower volumes.
"Our first priority is the health and safety of our employees
during the COVID-19 pandemic, as they perform the work necessary to
move the goods communities need during this national emergency,"
Fritz said. "The eighteen month implementation of Unified Plan 2020
has put our company in a position of strength, with a strong
balance sheet and ample liquidity, as we face today's fluid and
uncertain situation. We remain focused on providing a highly
consistent, reliable and efficient service product for our
customers."
First Quarter 2020 Earnings Conference Call
Union Pacific will webcast its first quarter 2020 earnings
release presentation live at www.up.com/investor and via
teleconference on Thursday, April 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 Bulk, 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 news release 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,
its ability to improve network performance, its results of
operations, and potential impacts of the COVID-19 pandemic. These
statements are, or will be, forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of 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 2019, which was filed with the SEC on February 7, 2020. 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,
|
1st
Quarter
|
|
For the
Periods Ended March 31,
|
2020
|
2019
|
%
|
|
|
Operating
Revenues
|
|
|
|
|
|
|
|
Freight
revenues
|
$
|
4,880
|
$
|
5,010
|
(3)
|
%
|
|
Other
|
|
349
|
|
374
|
(7)
|
|
|
Total operating
revenues
|
|
5,229
|
|
5,384
|
(3)
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
1,059
|
|
1,205
|
(12)
|
|
|
Depreciation
|
|
547
|
|
549
|
-
|
|
|
Purchased services and
materials
|
|
521
|
|
576
|
(10)
|
|
|
Fuel
|
|
434
|
|
531
|
(18)
|
|
|
Equipment and other
rents
|
|
227
|
|
258
|
(12)
|
|
|
Other
|
|
298
|
|
305
|
(2)
|
|
|
Total operating
expenses
|
|
3,086
|
|
3,424
|
(10)
|
|
|
Operating
Income
|
|
2,143
|
|
1,960
|
9
|
|
|
Other
income
|
|
53
|
|
77
|
(31)
|
|
|
Interest
expense
|
|
(278)
|
|
(247)
|
13
|
|
|
Income before
income taxes
|
|
1,918
|
|
1,790
|
7
|
|
|
Income
taxes
|
|
(444)
|
|
(399)
|
11
|
|
|
Net
Income
|
$
|
1,474
|
$
|
1,391
|
6
|
%
|
|
|
|
|
|
|
|
|
Share and
Per Share
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
|
2.15
|
$
|
1.94
|
11
|
%
|
|
Earnings per share -
diluted
|
$
|
2.15
|
$
|
1.93
|
11
|
|
|
Weighted average
number of shares - basic
|
|
684.3
|
|
716.8
|
(5)
|
|
|
Weighted average
number of shares - diluted
|
|
686.2
|
|
719.5
|
(5)
|
|
|
Dividends declared per
share
|
$
|
0.97
|
$
|
0.88
|
10
|
|
|
|
|
|
|
|
|
|
Operating
Ratio
|
|
59.0%
|
|
63.6%
|
(4.6)
|
pts
|
|
Effective
Tax Rate
|
|
23.1%
|
|
22.3%
|
0.8
|
pts
|
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
|
Freight Revenues
Statistics (unaudited)
|
|
|
|
|
|
|
|
|
1st
Quarter
|
|
For the
Periods Ended March 31,
|
2020
|
2019
|
%
|
|
|
Freight
Revenues (Millions)
|
|
|
|
|
|
|
|
Grain & grain
products
|
$
|
689
|
$
|
665
|
4
|
%
|
|
Fertilizer
|
|
174
|
|
159
|
9
|
|
|
Food &
refrigerated
|
|
250
|
|
242
|
3
|
|
|
Coal &
renewables
|
|
421
|
|
554
|
(24)
|
|
|
Bulk
|
|
1,534
|
|
1,620
|
(5)
|
|
|
Industrial chemicals
& plastics
|
|
495
|
|
452
|
10
|
|
|
Metals &
minerals
|
|
469
|
|
536
|
(13)
|
|
|
Forest
products
|
|
303
|
|
285
|
6
|
|
|
Energy &
specialized markets
|
|
627
|
|
566
|
11
|
|
|
Industrial
|
|
1,894
|
|
1,839
|
3
|
|
|
Automotive
|
|
524
|
|
520
|
1
|
|
|
Intermodal
|
|
928
|
|
1,031
|
(10)
|
|
|
Premium
|
|
1,452
|
|
1,551
|
(6)
|
|
|
Total
|
$
|
4,880
|
$
|
5,010
|
(3)
|
%
|
|
Revenue
Carloads (Thousands)
|
|
|
|
|
|
|
|
Grain & grain
products
|
|
175
|
|
169
|
4
|
%
|
|
Fertilizer
|
|
46
|
|
43
|
7
|
|
|
Food &
refrigerated
|
|
48
|
|
47
|
2
|
|
|
Coal &
renewables
|
|
208
|
|
256
|
(19)
|
|
|
Bulk
|
|
477
|
|
515
|
(7)
|
|
|
Industrial chemicals
& plastics
|
|
154
|
|
148
|
4
|
|
|
Metals &
minerals
|
|
174
|
|
180
|
(3)
|
|
|
Forest
products
|
|
56
|
|
56
|
-
|
|
|
Energy &
specialized markets
|
|
162
|
|
147
|
10
|
|
|
Industrial
|
|
546
|
|
531
|
3
|
|
|
Automotive
|
|
208
|
|
210
|
(1)
|
|
|
Intermodal
[a]
|
|
709
|
|
831
|
(15)
|
|
|
Premium
|
|
917
|
|
1,041
|
(12)
|
|
|
Total
|
|
1,940
|
|
2,087
|
(7)
|
%
|
|
Average
Revenue per Car
|
|
|
|
|
|
|
|
Grain & grain
products
|
$
|
3,940
|
$
|
3,924
|
-
|
%
|
|
Fertilizer
|
|
3,768
|
|
3,718
|
1
|
|
|
Food &
refrigerated
|
|
5,277
|
|
5,219
|
1
|
|
|
Coal &
renewables
|
|
2,022
|
|
2,162
|
(6)
|
|
|
Bulk
|
|
3,219
|
|
3,146
|
2
|
|
|
Industrial chemicals
& plastics
|
|
3,205
|
|
3,047
|
5
|
|
|
Metals &
minerals
|
|
2,697
|
|
2,968
|
(9)
|
|
|
Forest
products
|
|
5,457
|
|
5,145
|
6
|
|
|
Energy &
specialized markets
|
|
3,866
|
|
3,865
|
-
|
|
|
Industrial
|
|
3,469
|
|
3,465
|
-
|
|
|
Automotive
|
|
2,525
|
|
2,472
|
2
|
|
|
Intermodal
[a]
|
|
1,307
|
|
1,241
|
5
|
|
|
Premium
|
|
1,583
|
|
1,489
|
6
|
|
|
Average
|
$
|
2,516
|
$
|
2,401
|
5
|
%
|
|
|
|
[a]
|
For intermodal
shipments each container or trailer equals one carload.
|
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
|
Condensed
Consolidated Statements of Financial Position
(unaudited)
|
|
|
|
|
|
|
Mar.
31,
|
Dec.
31,
|
|
Millions,
Except Percentages
|
2020
|
2019
|
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,130
|
$
|
831
|
|
Short-term
investments
|
|
60
|
|
60
|
|
Other current
assets
|
|
2,614
|
|
2,568
|
|
Investments
|
|
2,078
|
|
2,050
|
|
Net
properties
|
|
54,121
|
|
53,916
|
|
Operating lease
assets
|
|
1,773
|
|
1,812
|
|
Other
assets
|
|
440
|
|
436
|
|
Total
assets
|
$
|
62,216
|
$
|
61,673
|
|
|
|
|
|
|
Liabilities
and Common Shareholders' Equity
|
|
|
|
|
|
Debt due within one
year
|
$
|
1,511
|
$
|
1,257
|
|
Other current
liabilities
|
|
3,130
|
|
3,094
|
|
Debt due after one
year
|
|
26,365
|
|
23,943
|
|
Operating lease
liabilities
|
|
1,339
|
|
1,471
|
|
Deferred income
taxes
|
|
12,088
|
|
11,992
|
|
Other long-term
liabilities
|
|
1,792
|
|
1,788
|
|
Total
liabilities
|
|
46,225
|
|
43,545
|
|
Total common
shareholders' equity
|
|
15,991
|
|
18,128
|
|
Total
liabilities and common shareholders' equity
|
$
|
62,216
|
$
|
61,673
|
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
|
Condensed
Consolidated Statements of Cash Flows (unaudited)
|
|
|
|
|
|
|
Millions,
|
Year-to-Date
|
|
For the
Periods Ended March 31,
|
2020
|
2019
|
|
Operating
Activities
|
|
|
|
|
|
Net income
|
$
|
1,474
|
$
|
1,391
|
|
Depreciation
|
|
547
|
|
549
|
|
Deferred income
taxes
|
|
91
|
|
103
|
|
Other - net
|
|
43
|
|
(84)
|
|
Cash provided
by operating activities
|
|
2,155
|
|
1,959
|
|
Investing
Activities
|
|
|
|
|
|
Capital
investments
|
|
(807)
|
|
(752)
|
|
Maturities of
short-term investments
|
|
70
|
|
90
|
|
Purchases of
short-term investments
|
|
(70)
|
|
(90)
|
|
Other - net
|
|
-
|
|
(32)
|
|
Cash used in
investing activities
|
|
(807)
|
|
(784)
|
|
Financing
Activities
|
|
|
|
|
|
Debt issued
|
|
2,996
|
|
2,992
|
|
Common share
repurchases
|
|
(2,556)
|
|
(2,987)
|
|
Dividends
paid
|
|
(660)
|
|
(626)
|
|
Accelerated share
repurchase programs pending final settlement
|
|
(400)
|
|
(500)
|
|
Debt repaid
|
|
(305)
|
|
(560)
|
|
Net issuance of
commercial paper
|
|
(1)
|
|
299
|
|
Other - net
|
|
(71)
|
|
(23)
|
|
Cash used in
financing activities
|
|
(997)
|
|
(1,405)
|
|
Net Change
in Cash, Cash Equivalents and Restricted Cash
|
|
351
|
|
(230)
|
|
Cash, cash
equivalents, and restricted cash at beginning of year
|
|
856
|
|
1,328
|
|
Cash, Cash
Equivalents, and Restricted Cash at End of Period
|
$
|
1,207
|
$
|
1,098
|
|
Free Cash
Flow*
|
|
|
|
|
|
Cash provided by
operating activities
|
$
|
2,155
|
$
|
1,959
|
|
Cash used in investing
activities
|
|
(807)
|
|
(784)
|
|
Dividends
paid
|
|
(660)
|
|
(626)
|
|
Free cash
flow
|
$
|
688
|
$
|
549
|
|
|
|
*
|
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)
|
|
|
|
|
|
|
|
1st
Quarter
|
|
For the
Periods Ended March 31,
|
2020
|
|
2019
|
%
|
|
|
Operating/Performance
Statistics
|
|
|
|
|
|
|
Freight car velocity
(daily miles per car) [a]
|
209
|
|
194
|
8
|
%
|
|
Average train speed
(miles per hour) [a] *
|
25.4
|
|
24.6
|
3
|
|
|
Average terminal dwell
time (hours) [a] *
|
23.8
|
|
26.8
|
(11)
|
|
|
Locomotive
productivity (GTMs per horsepower day)
|
131
|
|
111
|
18
|
|
|
Gross ton-miles (GTMs)
(millions)
|
201,297
|
|
210,319
|
(4)
|
|
|
Train length
(feet)
|
8,396
|
|
7,292
|
15
|
|
|
Intermodal car trip
plan compliance (%)
|
85
|
|
66
|
19
|
pts
|
|
Manifest/Automotive
car trip plan compliance (%)
|
64
|
|
63
|
1
|
pts
|
|
Workforce productivity
(car miles per employee)
|
894
|
|
812
|
10
|
|
|
Total employees
(average)
|
33,872
|
|
40,053
|
(15)
|
|
|
|
|
|
|
|
|
Locomotive
Fuel Statistics
|
|
|
|
|
|
|
Average fuel price per
gallon consumed
|
$
1.87
|
|
$ 2.07
|
(10)
|
%
|
|
Fuel consumed in
gallons (millions)
|
225
|
|
248
|
(9)
|
|
|
Fuel consumption
rate**
|
1.117
|
|
1.182
|
(5)
|
|
|
|
|
|
|
|
|
Revenue
Ton-Miles (Millions)
|
|
|
|
|
|
|
Grain & grain
products
|
16,111
|
|
16,177
|
-
|
%
|
|
Fertilizer
|
3,044
|
|
2,886
|
5
|
|
|
Food &
refrigerated
|
4,506
|
|
4,507
|
-
|
|
|
Coal &
renewables
|
20,005
|
|
26,329
|
(24)
|
|
|
Bulk
|
43,666
|
|
49,899
|
(12)
|
|
|
Industrial chemicals
& plastics
|
7,174
|
|
6,812
|
5
|
|
|
Metals &
minerals
|
8,533
|
|
9,919
|
(14)
|
|
|
Forest
products
|
6,041
|
|
5,844
|
3
|
|
|
Energy &
specialized markets
|
12,046
|
|
10,645
|
13
|
|
|
Industrial
|
33,794
|
|
33,220
|
2
|
|
|
Automotive
|
4,489
|
|
4,525
|
(1)
|
|
|
Intermodal
|
17,734
|
|
19,006
|
(7)
|
|
|
Premium
|
22,223
|
|
23,531
|
(6)
|
|
|
Total
|
99,683
|
|
106,650
|
(7)
|
%
|
|
|
|
|
|
|
|
|
|
[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
|
|
Non-GAAP Measures
Reconciliation to GAAP
|
|
|
Adjusted Debt /
Adjusted EBITDA*
|
|
Millions, Except
Ratios
|
Mar.
31,
|
Dec.
31,
|
|
for the Trailing
Twelve Months Ended [a]
|
2020
|
2019
|
|
Net
income
|
$
|
6,002
|
$
|
5,919
|
|
Add:
|
|
|
|
|
|
Income tax
expense
|
|
1,873
|
|
1,828
|
|
Depreciation
|
|
2,214
|
|
2,216
|
|
Interest
expense
|
|
1,081
|
|
1,050
|
|
EBITDA
|
$
|
11,170
|
$
|
11,013
|
|
Adjustments:
|
|
|
|
|
Other
income
|
|
(219)
|
|
(243)
|
|
Interest on
operating lease liabilities**
|
|
62
|
|
68
|
|
Adjusted
EBITDA
|
$
|
11,013
|
$
|
10,838
|
|
Debt
|
$
|
27,876
|
$
|
25,200
|
|
Operating lease
liabilities
|
|
1,665
|
|
1,833
|
|
Unfunded
pension and OPEB, net of taxes of $116 and $124
|
|
387
|
|
400
|
|
Adjusted
debt
|
$
|
29,928
|
$
|
27,433
|
|
Adjusted debt /
Adjusted EBITDA
|
|
2.7
|
|
2.5
|
|
|
|
[a]
|
The trailing twelve
months income statement information ended March 31, 2020 is
recalculated by taking the twelve months ended December 31, 2019,
subtracting the three months ended March 31, 2019, and adding the
three months ended March 31, 2020.
|
|
|
|
*
|
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 both March 31, 2020 and December 31, 2019, the
incremental borrowing rate on operating lease liabilities was
3.7%.
|
|
|
|
**
|
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.
|
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SOURCE Union Pacific Corporation