OMAHA, Neb., April 26, 2018 /PRNewswire/ --
First Quarter Results
- Diluted earnings per share of $1.68 increased 27 percent.
- Operating income totaled $1.9
billion, up 8 percent.
- Operating ratio of 64.6 percent, improved 0.6
points (see footnote).
Union Pacific Corporation (NYSE: UNP) today reported 2018 first
quarter net income of $1.3 billion,
or a first-quarter record $1.68 per
diluted share. This compares to about $1.1
billion, or $1.32 per diluted
share, in the first quarter 2017.
"Our solid first quarter results were a direct reflection of the
tremendous effort put forth by our entire workforce, and had it not
been for some network congestion it would have been even better,"
said Lance Fritz, Union Pacific
chairman, president and chief executive officer. "I am encouraged
by the work we are doing to quickly regain superior levels of
service and efficiency."
First Quarter Summary
Operating revenue of $5.5 billion
was up 7 percent in the first quarter 2018 compared to the first
quarter 2017. First quarter business volumes, as measured by total
revenue carloads, increased 2 percent compared to 2017. Volume
increases in energy, industrial and premium more than offset a
decline in agricultural products. In addition:
- Quarterly freight revenue improved 7 percent compared to the
first quarter 2017, as volume growth, increased fuel surcharge
revenue, core pricing gains and positive mix all contributed to the
increase.
- Union Pacific's 64.6 percent operating ratio improved 0.6
points (see footnote) compared to the first quarter 2017.
Higher fuel prices negatively impacted the operating ratio by about
0.2 points.
- The $2.13 per gallon average
quarterly diesel fuel price in the first quarter 2018 was 22
percent higher than the first quarter 2017.
- Quarterly train speed, as reported to the Association of
American Railroads, was 24.8 mph, 4 percent slower than the first
quarter 2017.
- Union Pacific's reportable personal injury rate of 0.74 per
200,000 employee-hours was a first quarter record, improving 17
percent compared to the first quarter 2017.
- The Company repurchased 9.3 million shares in the first quarter
2018 at an aggregate cost of $1.2
billion.
- Union Pacific redeemed $155
million of outstanding debentures and mortgage bonds,
resulting in an approximate 8 cent
reduction to diluted earnings per share.
Summary of First Quarter Freight Revenues
- Agricultural Products flat
- Industrial up 6 percent
- Premium up 7 percent
- Energy up 15 percent
2018 Outlook
"We are pleased with the improvement we have seen in recent
weeks and are confident in the plan we have in place to continue
building on the progress already made," Fritz said. "With the
economy favoring a number of our market segments, we are well
positioned to benefit from another year of positive volume growth
and solid core pricing gains."
Footnote: Certain prior
period amounts have been adjusted for the retrospective adoption of
Accounting Standard Update 2017-07 related to the presentation of
the components of net periodic pension and other postretirement
benefit costs.
First Quarter 2018 Earnings Conference Call
Union Pacific will host its first quarter 2018 earnings release
presentation live over the Internet and via teleconference on
Thursday, April 26, 2018 at
8:45 a.m. Eastern Time. The
presentation will be webcast live over the internet on Union
Pacific's website at www.up.com/investor. 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. In the past 10 years, 2008-2017,
Union Pacific invested approximately $34
billion in its network and operations to support America's
transportation infrastructure. The railroad's diversified business
mix includes Agricultural Products, Energy, Industrial and Premium.
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 2017, which was filed with the SEC on February 9, 2018. 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,
|
2018
|
2017
|
%
|
|
Operating
Revenues
|
|
|
|
|
|
|
Freight
revenues
|
$
|
5,122
|
$
|
4,794
|
7
|
%
|
Other
|
|
353
|
|
338
|
4
|
|
Total operating
revenues
|
|
5,475
|
|
5,132
|
7
|
|
Operating
Expenses
|
|
|
|
|
|
|
Compensation and
benefits*
|
|
1,273
|
|
1,262
|
1
|
|
Purchased services and
materials
|
|
599
|
|
566
|
6
|
|
Fuel
|
|
589
|
|
460
|
28
|
|
Depreciation
|
|
543
|
|
520
|
4
|
|
Equipment and other
rents
|
|
266
|
|
276
|
(4)
|
|
Other
|
|
266
|
|
260
|
2
|
|
Total operating
expenses
|
|
3,536
|
|
3,344
|
6
|
|
Operating
Income
|
|
1,939
|
|
1,788
|
8
|
|
Other
income/(expense)*
|
|
(42)
|
|
72
|
U
|
|
Interest
expense
|
|
(186)
|
|
(172)
|
8
|
|
Income before
income taxes
|
|
1,711
|
|
1,688
|
1
|
|
Income
taxes
|
|
(401)
|
|
(616)
|
(35)
|
|
Net
Income
|
$
|
1,310
|
$
|
1,072
|
22
|
%
|
|
|
|
|
|
|
|
Share and
Per Share
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
|
1.69
|
$
|
1.32
|
28
|
%
|
Earnings per share -
diluted
|
$
|
1.68
|
$
|
1.32
|
27
|
|
Weighted average
number of shares - basic
|
|
776.4
|
|
811.5
|
(4)
|
|
Weighted average
number of shares - diluted
|
|
779.6
|
|
814.8
|
(4)
|
|
Dividends declared per
share
|
$
|
0.73
|
$
|
0.605
|
21
|
|
|
|
|
|
|
|
|
Operating
Ratio*
|
|
64.6%
|
|
65.2%
|
(0.6)
|
pts
|
Effective
Tax Rate
|
|
23.4%
|
|
36.5%
|
(13.1)
|
pts
|
|
|
*
|
Certain prior period
amounts have been adjusted for the retrospective adoption of
Accounting Standard Update 2017-07 related to the presentation of
the components of net periodic pension and other postretirement
benefit costs.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Freight Revenues
Statistics (unaudited)
|
|
|
|
|
|
|
|
|
1st
Quarter
|
For the
Periods Ended March 31,
|
2018
|
2017
|
%
|
|
Freight
Revenues (Millions)
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
1,098
|
$
|
1,094
|
-
|
%
|
Energy
|
|
1,173
|
|
1,024
|
15
|
|
Industrial
|
|
1,340
|
|
1,264
|
6
|
|
Premium
|
|
1,511
|
|
1,412
|
7
|
|
Total
|
$
|
5,122
|
$
|
4,794
|
7
|
%
|
Revenue
Carloads (Thousands)
|
|
|
|
|
|
|
Agricultural
Products
|
|
279
|
|
290
|
(4)
|
%
|
Energy
|
|
419
|
|
395
|
6
|
|
Industrial
|
|
411
|
|
403
|
2
|
|
Premium
|
|
1,016
|
|
1,000
|
2
|
|
Total
|
|
2,125
|
|
2,088
|
2
|
%
|
Average
Revenue per Car
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
3,942
|
$
|
3,768
|
5
|
%
|
Energy
|
|
2,799
|
|
2,593
|
8
|
|
Industrial
|
|
3,262
|
|
3,140
|
4
|
|
Premium
|
|
1,487
|
|
1,413
|
5
|
|
Average
|
$
|
2,411
|
$
|
2,297
|
5
|
%
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Condensed
Consolidated Statements of Financial Position
(unaudited)
|
|
|
|
|
|
|
Mar.
31,
|
Dec.
31,
|
Millions,
Except Percentages
|
2018
|
2017
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,048
|
$
|
1,275
|
Short-term
investments
|
|
90
|
|
90
|
Other current
assets
|
|
2,759
|
|
2,641
|
Investments
|
|
1,810
|
|
1,809
|
Net
properties
|
|
51,696
|
|
51,605
|
Other
assets
|
|
386
|
|
386
|
Total
assets
|
$
|
57,789
|
$
|
57,806
|
|
|
|
|
|
Liabilities
and Common Shareholders' Equity
|
|
|
|
|
Debt due within one
year
|
$
|
1,891
|
$
|
800
|
Other current
liabilities
|
|
2,855
|
|
3,139
|
Debt due after one
year
|
|
15,697
|
|
16,144
|
Deferred income
taxes
|
|
11,050
|
|
10,936
|
Other long-term
liabilities
|
|
1,907
|
|
1,931
|
Total
liabilities
|
|
33,400
|
|
32,950
|
Total common
shareholders' equity
|
|
24,389
|
|
24,856
|
Total
liabilities and common shareholders' equity
|
$
|
57,789
|
$
|
57,806
|
|
|
|
|
|
Debt to
Capital
|
|
41.9%
|
|
40.5%
|
Adjusted
Debt to Capital*
|
|
45.1%
|
|
43.9%
|
|
|
*
|
Adjusted Debt to
Capital is a non-GAAP measure; however, management believes that it
is an important measure in evaluating our financial performance.
See page 6 for a reconciliation to GAAP.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Condensed
Consolidated Statements of Cash Flows (unaudited)
|
|
|
|
|
|
Millions,
|
Year-to-Date
|
For the
Periods Ended March 31,
|
2018
|
2017
|
Operating
Activities
|
|
|
|
|
Net income
|
$
|
1,310
|
$
|
1,072
|
Depreciation
|
|
543
|
|
520
|
Deferred income
taxes
|
|
112
|
|
145
|
Other - net
|
|
(64)
|
|
146
|
Cash provided
by operating activities
|
|
1,901
|
|
1,883
|
Investing
Activities
|
|
|
|
|
Capital
investments
|
|
(910)
|
|
(811)
|
Purchases of
short-term investments
|
|
(60)
|
|
(90)
|
Maturities of
short-term investments
|
|
60
|
|
60
|
Other - net
|
|
(9)
|
|
(2)
|
Cash used in
investing activities
|
|
(919)
|
|
(843)
|
Financing
Activities
|
|
|
|
|
Debt issued
|
|
1,706
|
|
200
|
Common shares
repurchased
|
|
(1,166)
|
|
(759)
|
Debt repaid
|
|
(1,157)
|
|
(184)
|
Dividends
paid
|
|
(568)
|
|
(492)
|
Other - net
|
|
(24)
|
|
(33)
|
Cash used in
financing activities
|
|
(1,209)
|
|
(1,268)
|
Net Change
in Cash and Cash Equivalents
|
|
(227)
|
|
(228)
|
Cash and cash
equivalents at beginning of year
|
|
1,275
|
|
1,277
|
Cash and
Cash Equivalents at End of Period
|
$
|
1,048
|
$
|
1,049
|
Free Cash
Flow*
|
|
|
|
|
Cash provided by
operating activities
|
$
|
1,901
|
$
|
1,883
|
Cash used in investing
activities
|
|
(919)
|
|
(843)
|
Dividends
paid
|
|
(568)
|
|
(492)
|
Free cash
flow
|
$
|
414
|
$
|
548
|
|
|
*
|
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,
|
2018
|
|
2017
|
%
|
|
Operating/Performance
Statistics
|
|
|
|
|
|
Gross ton-miles (GTMs)
(millions)
|
226,929
|
|
218,914
|
4
|
%
|
Employees
(average)
|
41,735
|
|
42,069
|
(1)
|
|
GTMs (millions) per
employee
|
5.44
|
|
5.20
|
5
|
|
|
|
|
|
|
|
Locomotive
Fuel Statistics
|
|
|
|
|
|
Average fuel price per
gallon consumed
|
$
2.13
|
|
$
1.75
|
22
|
%
|
Fuel consumed in
gallons (millions)
|
267
|
|
253
|
6
|
|
Fuel consumption
rate*
|
1.175
|
|
1.156
|
2
|
|
|
|
|
|
|
|
AAR Reported
Performance Measures
|
|
|
|
|
|
Average train speed
(miles per hour)
|
24.8
|
|
25.7
|
(4)
|
%
|
Average terminal dwell
time (hours)
|
33.0
|
|
30.6
|
8
|
|
|
|
|
|
|
|
Revenue
Ton-Miles (Millions)
|
|
|
|
|
|
Agricultural
Products
|
25,173
|
|
26,161
|
(4)
|
%
|
Energy
|
43,962
|
|
40,186
|
9
|
|
Industrial
|
24,290
|
|
24,053
|
1
|
|
Premium
|
23,975
|
|
23,679
|
1
|
|
Total
|
117,400
|
|
114,079
|
3
|
%
|
|
|
*
|
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
|
|
|
|
|
|
Debt to
Capital*
|
|
|
|
|
|
Mar.
31,
|
Dec.
31,
|
Millions,
Except Percentages
|
2018
|
2017
|
Debt
(a)
|
$
|
17,588
|
$
|
16,944
|
Equity
|
|
24,389
|
|
24,856
|
Capital
(b)
|
$
|
41,977
|
$
|
41,800
|
Debt to capital
(a/b)
|
|
41.9%
|
|
40.5%
|
|
|
*
|
Total debt divided by
total debt plus equity. We believe this measure is important to
management and investors in evaluating our balance sheet strength
and is important in managing our credit ratios and financing
relationships.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Debt to Capital, Reconciliation to GAAP*
|
|
|
|
|
|
Mar.
31,
|
Dec.
31,
|
Millions,
Except Percentages
|
2018
|
2017
|
Debt
|
$
|
17,588
|
$
|
16,944
|
Net present
value of operating leases
|
|
1,989
|
|
2,140
|
Unfunded
pension and OPEB, net of taxes of $145 and $238
|
|
473
|
|
396
|
Adjusted debt
(a)
|
|
20,050
|
|
19,480
|
Equity
|
|
24,389
|
|
24,856
|
Adjusted
capital (b)
|
$
|
44,439
|
$
|
44,336
|
Adjusted debt
to capital (a/b)
|
|
45.1%
|
|
43.9%
|
|
|
*
|
Total debt plus net
present value of operating leases plus after-tax unfunded pension
and OPEB obligation divided by total debt plus net present value of
operating leases plus after-tax unfunded pension and OPEB
obligation plus equity. Operating leases were discounted using 4.4%
at March 31, 2018, and 4.6% at December 31, 2017. The discount rate
reflects our effective interest rate. We believe this measure is
important to management and investors in evaluating the total
amount of leverage in our capital structure including off-balance
sheet lease obligations.
|
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SOURCE Union Pacific Corporation