OMAHA, Neb., July 19, 2018 /PRNewswire/ --
Second Quarter Results
- Diluted earnings per share of $1.98 increased 37 percent.
- Operating income totaled $2.1
billion, up 5 percent.
- Operating ratio of 63.0 percent, up 1.1
points (see footnote 1).
Union Pacific Corporation (NYSE: UNP) today reported 2018 second
quarter net income of $1.5 billion,
or a second quarter record $1.98 per
diluted share. This compares to $1.2
billion, or $1.45 per diluted
share, in the second quarter 2017.
"Overall, I am pleased with the effort put forth by the entire
Union Pacific team; however, I recognize the results could have
been better," said Lance Fritz,
Union Pacific chairman, president and chief executive officer.
"Network performance improved significantly coming out of the First
Quarter, but a tunnel outage and train-crew shortages created a
headwind in June. I am confident we have the right plans in
place to drive improvement in our operations and a better service
experience for our customers."
Second Quarter Summary
Operating revenue of $5.7 billion
was up 8 percent in the second quarter 2018 compared to the second
quarter 2017. Second quarter carloads increased 4 percent compared
to 2017. Volume increases in industrial and premium more than
offset declines in agricultural products and energy. In
addition:
- Quarterly freight revenue improved 8 percent compared to the
second quarter 2017, as volume growth, increased fuel surcharge
revenue, and core pricing gains were partially offset by negative
mix of traffic.
- Union Pacific's 63.0 percent operating ratio increased 1.1
points (see footnote) compared to the second quarter
2017.
- The $2.30 per gallon average
quarterly diesel fuel price in the second quarter 2018 was 36
percent higher than the second quarter 2017.
- Quarterly train speed, as reported to the Association of
American Railroads, was 24.7 mph, 3 percent slower than the second
quarter 2017.
- Union Pacific's first half reportable personal injury rate of
0.76 per 200,000 employee hours was flat compared to the first half
of 2017.
- The Company repurchased 33.2 million shares in the second
quarter 2018, including 19.9 million shares received as part of an
accelerated share repurchase program.
Summary of Second Quarter Freight Revenues
- Agricultural Products up 5 percent
- Energy up 5 percent
- Industrial up 8 percent
- Premium up 14 percent
2018 Outlook
"Looking to the remainder of the year, we expect the strong
business environment to continue as we regain our productivity
momentum and improve the value proposition for all of our
stakeholders," Fritz said.
Footnote 1: 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.
Second Quarter 2018 Earnings Conference Call
Union Pacific will host its second quarter 2018 earnings release
presentation live over the Internet and via teleconference on
Thursday, July 19, 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,
|
2nd
Quarter
|
|
Year-to-Date
|
For the
Periods Ended June 30,
|
2018
|
2017
|
%
|
|
|
2018
|
2017
|
%
|
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight
revenues
|
$
|
5,317
|
$
|
4,906
|
8
|
%
|
|
$
|
10,439
|
$
|
9,700
|
8
|
%
|
Other
|
|
355
|
|
344
|
3
|
|
|
|
708
|
|
682
|
4
|
|
Total operating
revenues
|
|
5,672
|
|
5,250
|
8
|
|
|
|
11,147
|
|
10,382
|
7
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits*
|
|
1,241
|
|
1,204
|
3
|
|
|
|
2,514
|
|
2,466
|
2
|
|
Fuel
|
|
643
|
|
434
|
48
|
|
|
|
1,232
|
|
894
|
38
|
|
Purchased services and
materials
|
|
630
|
|
597
|
6
|
|
|
|
1,229
|
|
1,163
|
6
|
|
Depreciation
|
|
546
|
|
525
|
4
|
|
|
|
1,089
|
|
1,045
|
4
|
|
Equipment and other
rents
|
|
265
|
|
273
|
(3)
|
|
|
|
531
|
|
549
|
(3)
|
|
Other
|
|
248
|
|
219
|
13
|
|
|
|
514
|
|
479
|
7
|
|
Total operating
expenses
|
|
3,573
|
|
3,252
|
10
|
|
|
|
7,109
|
|
6,596
|
8
|
|
Operating
Income
|
|
2,099
|
|
1,998
|
5
|
|
|
|
4,038
|
|
3,786
|
7
|
|
Other
income*
|
|
42
|
|
50
|
(16)
|
|
|
|
-
|
|
122
|
(100)
|
|
Interest
expense
|
|
(203)
|
|
(179)
|
13
|
|
|
|
(389)
|
|
(351)
|
11
|
|
Income before
income taxes
|
|
1,938
|
|
1,869
|
4
|
|
|
|
3,649
|
|
3,557
|
3
|
|
Income
taxes
|
|
(429)
|
|
(701)
|
(39)
|
|
|
|
(830)
|
|
(1,317)
|
(37)
|
|
Net
Income
|
$
|
1,509
|
$
|
1,168
|
29
|
%
|
|
$
|
2,819
|
$
|
2,240
|
26
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share and
Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
|
1.98
|
$
|
1.45
|
37
|
%
|
|
$
|
3.67
|
$
|
2.77
|
32
|
%
|
Earnings per share -
diluted
|
$
|
1.98
|
$
|
1.45
|
37
|
|
|
$
|
3.65
|
$
|
2.76
|
32
|
|
Weighted average
number of shares - basic
|
|
760.5
|
|
804.1
|
(5)
|
|
|
|
768.4
|
|
807.8
|
(5)
|
|
Weighted average
number of shares - diluted
|
|
763.7
|
|
807.2
|
(5)
|
|
|
|
771.6
|
|
811.0
|
(5)
|
|
Dividends declared per
share
|
$
|
0.73
|
$
|
0.605
|
21
|
|
|
$
|
1.46
|
$
|
1.21
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Ratio*
|
|
63.0%
|
|
61.9%
|
1.1
|
pts
|
|
|
63.8%
|
|
63.5%
|
0.3
|
pts
|
Effective
Tax Rate
|
|
22.1%
|
|
37.5%
|
(15.4)
|
pts
|
|
|
22.7%
|
|
37.0%
|
(14.3)
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2nd
Quarter
|
|
Year-to-Date
|
For the
Periods Ended June 30,
|
2018
|
2017
|
%
|
|
|
2018
|
2017
|
%
|
|
Freight
Revenues (Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
1,114
|
$
|
1,064
|
5
|
%
|
|
$
|
2,212
|
$
|
2,158
|
3
|
%
|
Energy
|
|
1,111
|
|
1,057
|
5
|
|
|
|
2,284
|
|
2,081
|
10
|
|
Industrial
|
|
1,437
|
|
1,334
|
8
|
|
|
|
2,777
|
|
2,598
|
7
|
|
Premium
|
|
1,655
|
|
1,451
|
14
|
|
|
|
3,166
|
|
2,863
|
11
|
|
Total
|
$
|
5,317
|
$
|
4,906
|
8
|
%
|
|
$
|
10,439
|
$
|
9,700
|
8
|
%
|
Revenue
Carloads (Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
|
285
|
|
289
|
(1)
|
%
|
|
|
564
|
|
579
|
(3)
|
%
|
Energy
|
|
387
|
|
391
|
(1)
|
|
|
|
806
|
|
786
|
3
|
|
Industrial
|
|
452
|
|
427
|
6
|
|
|
|
863
|
|
830
|
4
|
|
Premium
[a]
|
|
1,101
|
|
1,038
|
6
|
|
|
|
2,117
|
|
2,038
|
4
|
|
Total
|
|
2,225
|
|
2,145
|
4
|
%
|
|
|
4,350
|
|
4,233
|
3
|
%
|
Average
Revenue per Car
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
3,903
|
$
|
3,687
|
6
|
%
|
|
$
|
3,922
|
$
|
3,728
|
5
|
%
|
Energy
|
|
2,874
|
|
2,702
|
6
|
|
|
|
2,835
|
|
2,647
|
7
|
|
Industrial
|
|
3,178
|
|
3,120
|
2
|
|
|
|
3,218
|
|
3,130
|
3
|
|
Premium
|
|
1,503
|
|
1,398
|
8
|
|
|
|
1,495
|
|
1,405
|
6
|
|
Average
|
$
|
2,389
|
$
|
2,287
|
4
|
%
|
|
$
|
2,400
|
$
|
2,292
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
Jun.
30,
|
Dec.
31,
|
Millions,
Except Percentages
|
2018
|
2017
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,604
|
$
|
1,275
|
Short-term
investments
|
|
90
|
|
90
|
Other current
assets
|
|
2,800
|
|
2,641
|
Investments
|
|
1,856
|
|
1,809
|
Net
properties
|
|
51,947
|
|
51,605
|
Other
assets
|
|
392
|
|
386
|
Total
assets
|
$
|
58,689
|
$
|
57,806
|
|
|
|
|
|
Liabilities
and Common Shareholders' Equity
|
|
|
|
|
Debt due within one
year
|
$
|
1,456
|
$
|
800
|
Other current
liabilities
|
|
2,916
|
|
3,139
|
Debt due after one
year
|
|
21,357
|
|
16,144
|
Deferred income
taxes
|
|
11,109
|
|
10,936
|
Other long-term
liabilities
|
|
1,942
|
|
1,931
|
Total
liabilities
|
|
38,780
|
|
32,950
|
Total common
shareholders' equity
|
|
19,909
|
|
24,856
|
Total
liabilities and common shareholders' equity
|
$
|
58,689
|
$
|
57,806
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Condensed
Consolidated Statements of Cash Flows (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Millions,
|
Year-to-Date
|
For the
Periods Ended June 30,
|
2018
|
2017
|
Operating
Activities
|
|
|
|
|
Net income
|
$
|
2,819
|
$
|
2,240
|
Depreciation
|
|
1,089
|
|
1,045
|
Deferred income
taxes
|
|
204
|
|
298
|
Other - net
|
|
(79)
|
|
(124)
|
Cash provided
by operating activities
|
|
4,033
|
|
3,459
|
Investing
Activities
|
|
|
|
|
Capital
investments
|
|
(1,614)
|
|
(1,589)
|
Purchases of
short-term investments
|
|
(60)
|
|
(90)
|
Maturities of
short-term investments
|
|
60
|
|
60
|
Other - net
|
|
(11)
|
|
55
|
Cash used in
investing activities
|
|
(1,625)
|
|
(1,564)
|
Financing
Activities
|
|
|
|
|
Debt issued
|
|
6,892
|
|
1,186
|
Share repurchase
programs
|
|
(6,693)
|
|
(1,611)
|
Debt repaid
|
|
(1,295)
|
|
(444)
|
Dividends
paid
|
|
(1,125)
|
|
(980)
|
Net issuance of
commercial paper
|
|
196
|
|
-
|
Other - net
|
|
(54)
|
|
(37)
|
Cash used in
financing activities
|
|
(2,079)
|
|
(1,886)
|
Net Change
in Cash and Cash Equivalents
|
|
329
|
|
9
|
Cash and cash
equivalents at beginning of year
|
|
1,275
|
|
1,277
|
Cash and
Cash Equivalents at End of Period
|
$
|
1,604
|
$
|
1,286
|
Free Cash
Flow*
|
|
|
|
|
Cash provided by
operating activities
|
$
|
4,033
|
$
|
3,459
|
Cash used in investing
activities
|
|
(1,625)
|
|
(1,564)
|
Dividends
paid
|
|
(1,125)
|
|
(980)
|
Free cash
flow
|
$
|
1,283
|
$
|
915
|
|
|
*
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2nd
Quarter
|
|
Year-to-Date
|
For the
Periods Ended June 30,
|
2018
|
|
2017
|
%
|
|
|
2018
|
|
2017
|
%
|
|
Operating/Performance
Statistics
|
|
|
|
|
|
|
|
|
|
|
|
Gross ton-miles (GTMs)
(millions)
|
230,938
|
|
222,842
|
4
|
%
|
|
457,867
|
|
441,756
|
4
|
%
|
Employees
(average)
|
42,114
|
|
42,256
|
-
|
|
|
41,925
|
|
42,162
|
(1)
|
|
GTMs (millions) per
employee
|
5.48
|
|
5.27
|
4
|
|
|
10.92
|
|
10.48
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Locomotive
Fuel Statistics
|
|
|
|
|
|
|
|
|
|
|
|
Average fuel price per
gallon consumed
|
$
2.30
|
|
$
1.69
|
36
|
%
|
|
$
2.22
|
|
$
1.72
|
29
|
%
|
Fuel consumed in
gallons (millions)
|
270
|
|
246
|
10
|
|
|
537
|
|
499
|
8
|
|
Fuel consumption
rate*
|
1.170
|
|
1.105
|
6
|
|
|
1.173
|
|
1.130
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AAR Reported
Performance Measures
|
|
|
|
|
|
|
|
|
|
|
|
Average train speed
(miles per hour)
|
24.7
|
|
25.4
|
(3)
|
%
|
|
24.8
|
|
25.6
|
(3)
|
%
|
Average terminal dwell
time (hours)
|
29.5
|
|
28.3
|
4
|
|
|
31.2
|
|
29.4
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
Ton-Miles (Millions)
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
25,908
|
|
25,075
|
3
|
%
|
|
51,081
|
|
51,236
|
-
|
%
|
Energy
|
40,002
|
|
40,317
|
(1)
|
|
|
83,964
|
|
80,503
|
4
|
|
Industrial
|
25,750
|
|
25,095
|
3
|
|
|
50,040
|
|
49,148
|
2
|
|
Premium
|
25,976
|
|
24,335
|
7
|
|
|
49,951
|
|
48,014
|
4
|
|
Total
|
117,636
|
|
114,822
|
2
|
%
|
|
235,036
|
|
228,901
|
3
|
%
|
|
|
*
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
Millions,
Except Per Share Amounts and Percentages,
|
|
1st
Qtr
|
2nd
Qtr
|
|
Year-to-Date
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
Freight
revenues
|
$
|
5,122
|
|
$
|
5,317
|
|
$
|
10,439
|
Other
revenues
|
|
353
|
|
|
355
|
|
|
708
|
Total operating
revenues
|
|
5,475
|
|
|
5,672
|
|
|
11,147
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
1,273
|
|
|
1,241
|
|
|
2,514
|
Fuel
|
|
589
|
|
|
643
|
|
|
1,232
|
Purchased services and
materials
|
|
599
|
|
|
630
|
|
|
1,229
|
Depreciation
|
|
543
|
|
|
546
|
|
|
1,089
|
Equipment and other
rents
|
|
266
|
|
|
265
|
|
|
531
|
Other
|
|
266
|
|
|
248
|
|
|
514
|
Total operating
expenses
|
|
3,536
|
|
|
3,573
|
|
|
7,109
|
Operating
Income
|
|
1,939
|
|
|
2,099
|
|
|
4,038
|
Other
income/(expense)
|
|
(42)
|
|
|
42
|
|
|
-
|
Interest
expense
|
|
(186)
|
|
|
(203)
|
|
|
(389)
|
Income before
income taxes
|
|
1,711
|
|
|
1,938
|
|
|
3,649
|
Income
taxes
|
|
(401)
|
|
|
(429)
|
|
|
(830)
|
Net
Income
|
$
|
1,310
|
|
$
|
1,509
|
|
$
|
2,819
|
|
|
|
|
|
|
|
|
|
Share and
Per Share
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
|
1.69
|
|
$
|
1.98
|
|
$
|
3.67
|
Earnings per share -
diluted
|
$
|
1.68
|
|
$
|
1.98
|
|
$
|
3.65
|
Weighted average
number of shares - basic
|
|
776.4
|
|
|
760.5
|
|
|
768.4
|
Weighted average
number of shares - diluted
|
|
779.6
|
|
|
763.7
|
|
|
771.6
|
Dividends declared per
share
|
$
|
0.73
|
|
$
|
0.73
|
|
$
|
1.46
|
|
|
|
|
|
|
|
|
|
Operating
Ratio
|
|
64.6
|
%
|
|
63.0
|
%
|
|
63.8%
|
Effective
Tax Rate
|
|
23.4
|
%
|
|
22.1
|
%
|
|
22.7%
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Freight Revenues
Statistics (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
1st
Qtr
|
2nd
Qtr
|
Year-to-Date
|
Freight
Revenues (Millions)
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
1,098
|
$
|
1,114
|
$
|
2,212
|
Energy
|
|
1,173
|
|
1,111
|
|
2,284
|
Industrial
|
|
1,340
|
|
1,437
|
|
2,777
|
Premium
|
|
1,511
|
|
1,655
|
|
3,166
|
Total
|
$
|
5,122
|
$
|
5,317
|
$
|
10,439
|
Revenue
Carloads (Thousands)
|
|
|
|
|
|
|
Agricultural
Products
|
|
279
|
|
285
|
|
564
|
Energy
|
|
419
|
|
387
|
|
806
|
Industrial
|
|
411
|
|
452
|
|
863
|
Premium
[a]
|
|
1,016
|
|
1,101
|
|
2,117
|
Total
|
|
2,125
|
|
2,225
|
|
4,350
|
Average
Revenue per Car
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
3,942
|
$
|
3,903
|
$
|
3,922
|
Energy
|
|
2,799
|
|
2,874
|
|
2,835
|
Industrial
|
|
3,262
|
|
3,178
|
|
3,218
|
Premium
|
|
1,487
|
|
1,503
|
|
1,495
|
Average
|
$
|
2,411
|
$
|
2,389
|
$
|
2,400
|
|
|
[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
|
Jun.
30,
|
Dec.
31,
|
for the Twelve
Months Ended
|
2018
|
2017
|
Net
income
|
$
|
11,291
|
$
|
10,712
|
Less:
|
|
|
|
|
Other
income
|
|
123
|
|
245
|
Add:
|
|
|
|
|
Income tax
expense/(benefit)
|
|
(3,567)
|
|
(3,080)
|
Depreciation
|
|
2,149
|
|
2,105
|
Interest
expense
|
|
757
|
|
719
|
EBITDA
|
$
|
10,507
|
$
|
10,211
|
Interest on
present value of operating leases
|
|
89
|
|
98
|
Adjusted EBITDA
(a)
|
$
|
10,596
|
$
|
10,309
|
Debt
|
$
|
22,813
|
$
|
16,944
|
Net present
value of operating leases
|
|
2,073
|
|
2,140
|
Unfunded
pension and OPEB, net of taxes of $133 and $238
|
|
470
|
|
396
|
Adjusted debt
(b)
|
$
|
25,356
|
$
|
19,480
|
Adjusted debt /
Adjusted EBITDA (b/a)
|
|
2.4
|
|
1.9
|
|
|
*
|
Total debt plus net
present value of operating leases plus after-tax unfunded pension
and OPEB obligation divided by net income less income tax benefit
and other income plus depreciation, interest expense, and interest
on present value of operating leases. Operating leases were
discounted using 4.3% at June 30, 2018, and 4.6% at December 31,
2017. Adjusted debt to adjusted EBITDA (earnings before interest,
taxes, depreciation, amortization, and interest on present value of
operating leases) 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.
|
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SOURCE Union Pacific