OMAHA, Neb., Oct. 17, 2019 /PRNewswire/ --
Third Quarter Results
- Diluted earnings per share of $2.22 increased 3 percent.
- Operating ratio of 59.5 percent improved 2.2
points.
- Operating income of $2.2
billion was down 2 percent.
Union Pacific Corporation (NYSE: UNP) today reported 2019 third
quarter net income of $1.6 billion,
or $2.22 per diluted share. This
compares to $1.6 billion, or
$2.15 per diluted share, in the third
quarter 2018.
"Given the challenging volume environment we delivered solid
third quarter financial results, including an all-time best
quarterly operating ratio of 59.5 percent," said Lance Fritz, Union Pacific chairman, president
and chief executive officer. "The work our employees are doing as
part of Unified Plan 2020 is foundational to the company's success
and I am confident there are additional improvement opportunities
going forward for our customers and shareholders."
Third Quarter Summary
Operating revenue of $5.5 billion
was down 7 percent in third quarter 2019, compared to third quarter
2018. Third quarter business volumes, as measured by total revenue
carloads, decreased 8 percent compared to 2018. Growth in
industrial volumes was more than offset by declines in agricultural
products, premium and energy shipments. In addition:
- Quarterly freight revenue declined 7 percent, compared to third
quarter 2018, as core pricing gains were offset by lower volumes,
decreased fuel surcharge revenue and negative mix.
- Union Pacific's 59.5 percent operating ratio was an all-time
best and improved 2.2 points, compared to third quarter 2018.
- The $2.09 per gallon average
quarterly diesel fuel price in the third quarter 2019 was 12
percent lower than third quarter 2018.
- Quarterly freight car velocity was 213 daily miles per car, a
10 percent improvement compared to the third quarter 2018.
- Terminal dwell was 23.4 hours, a 20 percent improvement
compared to third quarter 2018.
- Union Pacific's reportable personal injury rate was 0.82 per
200,000 employee-hours for the first three quarters 2019, compared
to 0.77 for the same period 2018.
- The Company repurchased 6.4 million shares in the third quarter
2019 at an aggregate cost of $1.1
billion. Union Pacific also received 3.2 million shares to
complete a $2.5 billion Accelerated
Share Repurchase program initiated in February 2019.
Summary of Third Quarter Freight Revenues
- Agricultural Products down 1 percent
- Industrial down 1 percent
- Premium down 9 percent
- Energy down 20 percent
2019 Outlook
"We look forward to building on our Unified Plan 2020 successes
as we provide a highly consistent and reliable service product for
our customers," Fritz said. "We remain squarely focused on driving
long-term shareholder value by appropriately investing in the
railroad and returning excess cash to our shareholders."
Third Quarter 2019 Earnings Conference Call
Union Pacific will webcast its third quarter 2019 earnings
release presentation live at www.up.com/investor and via
teleconference on Thursday, October 17,
2019 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.
Union Pacific Investor contact: Mike Miller at 402-544-4227 or
mvmiller@up.com
Union Pacific Media contact: Raquel Espinoza at 402-544-5034 or
respinoza@up.com
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,
|
3rd
Quarter
|
|
Year-to-Date
|
For the Periods
Ended September 30,
|
2019
|
2018
|
%
|
|
|
2019
|
2018
|
%
|
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight
revenues
|
$
|
5,146
|
$
|
5,558
|
(7)
|
%
|
|
$
|
15,392
|
$
|
15,997
|
(4)
|
%
|
Other
|
|
370
|
|
370
|
-
|
|
|
|
1,104
|
|
1,078
|
2
|
|
Total operating
revenues
|
|
5,516
|
|
5,928
|
(7)
|
|
|
|
16,496
|
|
17,075
|
(3)
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
1,134
|
|
1,262
|
(10)
|
|
|
|
3,484
|
|
3,776
|
(8)
|
|
Purchased services and
materials
|
|
574
|
|
632
|
(9)
|
|
|
|
1,723
|
|
1,861
|
(7)
|
|
Depreciation
|
|
557
|
|
547
|
2
|
|
|
|
1,657
|
|
1,636
|
1
|
|
Fuel
|
|
504
|
|
659
|
(24)
|
|
|
|
1,595
|
|
1,891
|
(16)
|
|
Equipment and other
rents
|
|
236
|
|
272
|
(13)
|
|
|
|
754
|
|
803
|
(6)
|
|
Other
|
|
277
|
|
287
|
(3)
|
|
|
|
829
|
|
801
|
3
|
|
Total operating
expenses
|
|
3,282
|
|
3,659
|
(10)
|
|
|
|
10,042
|
|
10,768
|
(7)
|
|
Operating
Income
|
|
2,234
|
|
2,269
|
(2)
|
|
|
|
6,454
|
|
6,307
|
2
|
|
Other
income
|
|
53
|
|
48
|
10
|
|
|
|
187
|
|
48
|
F
|
|
Interest
expense
|
|
(266)
|
|
(241)
|
10
|
|
|
|
(772)
|
|
(630)
|
23
|
|
Income before income
taxes
|
|
2,021
|
|
2,076
|
(3)
|
|
|
|
5,869
|
|
5,725
|
3
|
|
Income
taxes
|
|
(466)
|
|
(483)
|
(4)
|
|
|
|
(1,353)
|
|
(1,313)
|
3
|
|
Net
Income
|
$
|
1,555
|
$
|
1,593
|
(2)
|
%
|
|
$
|
4,516
|
$
|
4,412
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share and Per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
|
2.22
|
$
|
2.16
|
3
|
%
|
|
$
|
6.39
|
$
|
5.82
|
10
|
%
|
Earnings per share -
diluted
|
$
|
2.22
|
$
|
2.15
|
3
|
|
|
$
|
6.36
|
$
|
5.79
|
10
|
|
Weighted average
number of shares - basic
|
|
699.3
|
|
737.4
|
(5)
|
|
|
|
707.2
|
|
758.1
|
(7)
|
|
Weighted average
number of shares - diluted
|
|
701.9
|
|
740.9
|
(5)
|
|
|
|
709.8
|
|
761.4
|
(7)
|
|
Dividends declared per
share
|
$
|
0.97
|
$
|
0.80
|
21
|
|
|
$
|
2.73
|
$
|
2.26
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Ratio
|
|
59.5%
|
|
61.7%
|
(2.2)
|
pts
|
|
|
60.9%
|
|
63.1%
|
(2.2)
|
pts
|
Effective Tax
Rate
|
|
23.1%
|
|
23.3%
|
(0.2)
|
pts
|
|
|
23.1%
|
|
22.9%
|
0.2
|
pts
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
Freight Revenues
Statistics (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd
Quarter
|
|
Year-to-Date
|
For the Periods
Ended September 30,
|
2019
|
2018
|
%
|
|
|
2019
|
2018
|
%
|
|
Freight
Revenues (Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
1,123
|
$
|
1,133
|
(1)
|
%
|
|
$
|
3,345
|
$
|
3,345
|
-
|
%
|
Energy
|
|
975
|
|
1,214
|
(20)
|
|
|
|
2,923
|
|
3,498
|
(16)
|
|
Industrial
|
|
1,485
|
|
1,497
|
(1)
|
|
|
|
4,389
|
|
4,274
|
3
|
|
Premium
|
|
1,563
|
|
1,714
|
(9)
|
|
|
|
4,735
|
|
4,880
|
(3)
|
|
Total
|
$
|
5,146
|
$
|
5,558
|
(7)
|
%
|
|
$
|
15,392
|
$
|
15,997
|
(4)
|
%
|
Revenue
Carloads (Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
|
278
|
|
285
|
(2)
|
%
|
|
|
821
|
|
849
|
(3)
|
%
|
Energy
|
|
374
|
|
440
|
(15)
|
|
|
|
1,083
|
|
1,246
|
(13)
|
|
Industrial
|
|
467
|
|
458
|
2
|
|
|
|
1,356
|
|
1,321
|
3
|
|
Premium
[a]
|
|
1,010
|
|
1,133
|
(11)
|
|
|
|
3,093
|
|
3,250
|
(5)
|
|
Total
|
|
2,129
|
|
2,316
|
(8)
|
%
|
|
|
6,353
|
|
6,666
|
(5)
|
%
|
Average Revenue
per Car
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
4,042
|
$
|
3,973
|
2
|
%
|
|
$
|
4,073
|
$
|
3,939
|
3
|
%
|
Energy
|
|
2,613
|
|
2,757
|
(5)
|
|
|
|
2,700
|
|
2,807
|
(4)
|
|
Industrial
|
|
3,178
|
|
3,269
|
(3)
|
|
|
|
3,236
|
|
3,236
|
-
|
|
Premium
|
|
1,546
|
|
1,513
|
2
|
|
|
|
1,531
|
|
1,501
|
2
|
|
Average
|
$
|
2,417
|
$
|
2,399
|
1
|
%
|
|
$
|
2,423
|
$
|
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)
|
|
|
|
|
|
|
Sep.
30,
|
Dec.
31,
|
Millions, Except
Percentages
|
2019
|
2018
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,250
|
$
|
1,273
|
Short-term
investments
|
|
60
|
|
60
|
Other current
assets
|
|
2,763
|
|
2,830
|
Investments
|
|
2,003
|
|
1,912
|
Net
properties
|
|
53,488
|
|
52,679
|
Operating lease
assets
|
|
1,931
|
|
-
|
Other
assets
|
|
483
|
|
393
|
Total
assets
|
$
|
61,978
|
$
|
59,147
|
|
|
|
|
|
Liabilities and
Common Shareholders' Equity
|
|
|
|
|
Debt due within one
year
|
$
|
1,421
|
$
|
1,466
|
Other current
liabilities
|
|
3,166
|
|
3,160
|
Debt due after one
year
|
|
24,314
|
|
20,925
|
Operating lease
liabilities
|
|
1,542
|
|
-
|
Deferred income
taxes
|
|
11,744
|
|
11,302
|
Other long-term
liabilities
|
|
1,775
|
|
1,871
|
Total
liabilities
|
|
43,962
|
|
38,724
|
Total common
shareholders' equity
|
|
18,016
|
|
20,423
|
Total liabilities and
common shareholders' equity
|
$
|
61,978
|
$
|
59,147
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
Condensed
Consolidated Statements of Cash Flows (unaudited)
|
|
|
|
|
|
Millions,
|
Year-to-Date
|
For the Periods
Ended September 30,
|
2019
|
2018
|
Operating
Activities
|
|
|
|
|
Net income
|
$
|
4,516
|
$
|
4,412
|
Depreciation
|
|
1,657
|
|
1,636
|
Deferred income
taxes
|
|
297
|
|
312
|
Other - net
|
|
(206)
|
|
14
|
Cash provided by
operating activities
|
|
6,264
|
|
6,374
|
Investing
Activities
|
|
|
|
|
Capital
investments
|
|
(2,495)
|
|
(2,428)
|
Maturities of
short-term investments
|
|
120
|
|
90
|
Purchases of
short-term investments
|
|
(110)
|
|
(90)
|
Other - net
|
|
(22)
|
|
(6)
|
Cash used in
investing activities
|
|
(2,507)
|
|
(2,434)
|
Financing
Activities
|
|
|
|
|
Common share
repurchases
|
|
(5,162)
|
|
(6,304)
|
Debt issued
|
|
3,986
|
|
6,992
|
Dividends
paid
|
|
(1,925)
|
|
(1,716)
|
Debt repaid
|
|
(642)
|
|
(1,807)
|
Net issuance of
commercial paper
|
|
(5)
|
|
195
|
Accelerated share
repurchase programs pending final settlement
|
|
-
|
|
(720)
|
Other - net
|
|
(34)
|
|
(45)
|
Cash used in
financing activities
|
|
(3,782)
|
|
(3,405)
|
Net Change in
Cash, Cash Equivalents and Restricted Cash
|
|
(25)
|
|
535
|
Cash, cash
equivalents, and restricted cash at beginning of year
|
|
1,328
|
|
1,275
|
Cash, Cash
Equivalents, and Restricted Cash at End of Period
|
$
|
1,303
|
$
|
1,810
|
Free Cash
Flow*
|
|
|
|
|
Cash provided by
operating activities
|
$
|
6,264
|
$
|
6,374
|
Cash used in investing
activities
|
|
(2,507)
|
|
(2,434)
|
Dividends
paid
|
|
(1,925)
|
|
(1,716)
|
Free cash
flow
|
$
|
1,832
|
$
|
2,224
|
|
|
*
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd
Quarter
|
|
Year-to-Date
|
For the Periods
Ended September 30,
|
2019
|
|
2018
|
%
|
|
|
2019
|
|
2018
|
%
|
|
Operating/Performance Statistics
|
|
|
|
|
|
|
|
|
|
|
|
Freight car velocity
(daily miles per car)
|
213
|
|
193
|
10
|
%
|
|
201
|
|
189
|
6
|
%
|
Average train speed
(miles per hour)*
|
23.7
|
|
24.0
|
(1)
|
|
|
23.4
|
|
24.5
|
(4)
|
|
Average terminal dwell
time (hours)*
|
23.4
|
|
29.3
|
(20)
|
|
|
25.1
|
|
30.6
|
(18)
|
|
Locomotive
productivity (GTMs per horsepower day)
|
124
|
|
105
|
18
|
|
|
118
|
|
104
|
13
|
|
Gross ton-miles (GTMs)
(millions)
|
215,487
|
|
240,183
|
(10)
|
|
|
645,815
|
|
698,050
|
(7)
|
|
Workforce productivity
(car miles per employee)
|
883
|
|
852
|
4
|
|
|
853
|
|
838
|
2
|
|
Employees
(average)
|
36,659
|
|
42,323
|
(13)
|
|
|
38,456
|
|
42,057
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Locomotive Fuel
Statistics
|
|
|
|
|
|
|
|
|
|
|
|
Average fuel price per
gallon consumed
|
$
2.09
|
|
$ 2.38
|
(12)
|
%
|
|
$
2.13
|
|
$ 2.27
|
(6)
|
%
|
Fuel consumed in
gallons (millions)
|
232
|
|
266
|
(13)
|
|
|
725
|
|
803
|
(10)
|
|
Fuel consumption
rate**
|
1.075
|
|
1.109
|
(3)
|
|
|
1.122
|
|
1.151
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Ton-Miles
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
24,001
|
|
25,911
|
(7)
|
%
|
|
72,805
|
|
76,992
|
(5)
|
%
|
Energy
|
36,053
|
|
45,190
|
(20)
|
|
|
105,268
|
|
129,154
|
(18)
|
|
Industrial
|
25,080
|
|
25,899
|
(3)
|
|
|
74,934
|
|
75,939
|
(1)
|
|
Premium
|
22,973
|
|
26,313
|
(13)
|
|
|
70,494
|
|
76,264
|
(8)
|
|
Total
|
108,107
|
|
123,313
|
(12)
|
%
|
|
323,501
|
|
358,349
|
(10)
|
%
|
|
|
*
|
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
|
Year-to-Date
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
Freight
revenues
|
$
|
5,010
|
$
|
5,236
|
$
|
5,146
|
$
|
15,392
|
Other
revenues
|
|
374
|
|
360
|
|
370
|
|
1,104
|
Total operating
revenues
|
|
5,384
|
|
5,596
|
|
5,516
|
|
16,496
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
1,205
|
|
1,145
|
|
1,134
|
|
3,484
|
Purchased services and
materials
|
|
576
|
|
573
|
|
574
|
|
1,723
|
Depreciation
|
|
549
|
|
551
|
|
557
|
|
1,657
|
Fuel
|
|
531
|
|
560
|
|
504
|
|
1,595
|
Equipment and other
rents
|
|
258
|
|
260
|
|
236
|
|
754
|
Other
|
|
305
|
|
247
|
|
277
|
|
829
|
Total operating
expenses
|
|
3,424
|
|
3,336
|
|
3,282
|
|
10,042
|
Operating
Income
|
|
1,960
|
|
2,260
|
|
2,234
|
|
6,454
|
Other
income
|
|
77
|
|
57
|
|
53
|
|
187
|
Interest
expense
|
|
(247)
|
|
(259)
|
|
(266)
|
|
(772)
|
Income before income
taxes
|
|
1,790
|
|
2,058
|
|
2,021
|
|
5,869
|
Income
taxes
|
|
(399)
|
|
(488)
|
|
(466)
|
|
(1,353)
|
Net
Income
|
$
|
1,391
|
$
|
1,570
|
$
|
1,555
|
$
|
4,516
|
|
|
|
|
|
|
|
|
|
Share and Per
Share
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
|
1.94
|
$
|
2.23
|
$
|
2.22
|
$
|
6.39
|
Earnings per share -
diluted
|
$
|
1.93
|
$
|
2.22
|
$
|
2.22
|
$
|
6.36
|
Weighted average
number of shares - basic
|
|
716.8
|
|
705.5
|
|
699.3
|
|
707.2
|
Weighted average
number of shares - diluted
|
|
719.5
|
|
708.0
|
|
701.9
|
|
709.8
|
Dividends declared per
share
|
$
|
0.88
|
$
|
0.88
|
$
|
0.97
|
$
|
2.73
|
|
|
|
|
|
|
|
|
|
Operating
Ratio
|
|
63.6%
|
|
59.6%
|
|
59.5%
|
|
60.9%
|
Effective Tax
Rate
|
|
22.3%
|
|
23.7%
|
|
23.1%
|
|
23.1%
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
Freight Revenues
Statistics (unaudited)
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
Year-to-Date
|
Freight
Revenues (Millions)
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
1,067
|
$
|
1,155
|
$
|
1,123
|
$
|
3,345
|
Energy
|
|
982
|
|
966
|
|
975
|
|
2,923
|
Industrial
|
|
1,410
|
|
1,494
|
|
1,485
|
|
4,389
|
Premium
|
|
1,551
|
|
1,621
|
|
1,563
|
|
4,735
|
Total
|
$
|
5,010
|
$
|
5,236
|
$
|
5,146
|
$
|
15,392
|
Revenue
Carloads (Thousands)
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
|
259
|
|
284
|
|
278
|
|
821
|
Energy
|
|
358
|
|
351
|
|
374
|
|
1,083
|
Industrial
|
|
429
|
|
460
|
|
467
|
|
1,356
|
Premium
[a]
|
|
1,041
|
|
1,042
|
|
1,010
|
|
3,093
|
Total
|
|
2,087
|
|
2,137
|
|
2,129
|
|
6,353
|
Average Revenue
per Car
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
4,123
|
$
|
4,057
|
$
|
4,042
|
$
|
4,073
|
Energy
|
|
2,740
|
|
2,753
|
|
2,613
|
|
2,700
|
Industrial
|
|
3,292
|
|
3,242
|
|
3,178
|
|
3,236
|
Premium
|
|
1,489
|
|
1,557
|
|
1,546
|
|
1,531
|
Average
|
$
|
2,401
|
$
|
2,450
|
$
|
2,417
|
$
|
2,423
|
|
|
[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
|
Sep.
30,
|
Dec.
31,
|
for the Trailing
Twelve Months Ended [a]
|
2019
|
2018
|
Net income
|
$
|
6,070
|
$
|
5,966
|
Add:
|
|
|
|
|
Income tax
expense
|
|
1,815
|
|
1,775
|
Depreciation
|
|
2,212
|
|
2,191
|
Interest
expense
|
|
1,012
|
|
870
|
EBITDA
|
$
|
11,109
|
$
|
10,802
|
Adjustments:
|
|
|
|
Other
income
|
|
(233)
|
|
(94)
|
Interest on operating
lease liabilities**
|
|
71
|
|
84
|
Adjusted EBITDA
(a)
|
$
|
10,947
|
$
|
10,792
|
Debt
|
$
|
25,735
|
$
|
22,391
|
Operating lease
liabilities***
|
|
1,919
|
|
2,271
|
Unfunded pension and
OPEB, net of taxes of $104 and $135
|
|
347
|
|
456
|
Adjusted debt
(b)
|
$
|
28,001
|
$
|
25,118
|
Adjusted debt /
Adjusted EBITDA (b/a)
|
|
2.6
|
|
2.3
|
|
|
[a]
|
The trailing twelve
months income statement information ended September 30, 2019 is
recalculated by taking the twelve months ended December 31, 2018,
subtracting the nine months ended September 30, 2018, and adding
the nine months ended September 30, 2019.
|
|
|
*
|
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 September 30, 2019 and December 31, 2018, 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.
|
|
|
***
|
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.
|
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SOURCE Union Pacific Corporation