OMAHA, Neb., April 22, 2021 /PRNewswire/ -- Union Pacific Corporation (NYSE: UNP) today reported 2021 first quarter net income of $1.3 billion, or $2.00 per diluted share. This compares to $1.5 billion, or $2.15 per diluted share, in the first quarter 2020.

Union Pacific. (PRNewsFoto/Union Pacific) (PRNewsfoto/Union Pacific)

"The first quarter presented some real challenges that impacted our results, but the team did a great job managing the business," said Lance Fritz, Union Pacific chairman, president, and chief executive officer. "We generated solid productivity through efficient use of our resources despite the significant weather event that covered most of our network in February and early March. I am particularly proud of the women and men of Union Pacific who rolled up their sleeves and kept the network safe, efficient and stable. Looking to the rest of the year, an improving economic outlook, our continued commitment to value based pricing that exceeds inflation and the opportunity for strong productivity give us confidence to affirm our 2021 guidance."

First Quarter Summary
Operating revenue of $5.0 billion was down 4% in first quarter 2021 compared to first quarter 2020. First quarter business volumes, as measured by total revenue carloads, decreased 1% compared to 2020 driven by declines in industrial and bulk shipments, partially offset by strength in premium carloads. In addition, for the first quarter 2021 compared to 2020:


  • Quarterly freight revenue declined 5%, as core pricing gains were more than offset by a less favorable business mix, decreased fuel surcharge revenue, and volume declines.
  • Union Pacific's 60.1% operating ratio increased 110 basis points, negatively impacted by weather and rising fuel prices in the quarter.




Operating Ratio

Earnings Per

Diluted Share

First Quarter 2020

59.0%

$2.15

Weather Impact

(1.6) pts

($0.16)

Fuel Impact

(1.0) pts

($0.11)

Core Results

1.5 pts

$0.12

First Quarter 2021

60.1%

$2.00

 

  • Union Pacific's reportable personal injury rate was 0.85 per 200,000 employee-hours compared to 0.80 for first quarter 2020.
  • Fuel consumption rate, measured in gallons of fuel per thousand gross ton-miles (GTMs), was flat.
  • Quarterly freight car velocity was 209 daily miles per car, a 1% decline.
  • Quarterly locomotive productivity was 138 gross ton-miles per horsepower day, a 5% improvement.
  • Quarterly workforce productivity was 1,002 car miles per employee, a 12% improvement.
  • Average maximum train length was 9,247 feet, a 10% increase.
  • The company repurchased 6.7 million shares in first quarter 2021 at an aggregate cost of $1.4 billion.

Summary of First Quarter Freight Revenues

  • Bulk down 1%
  • Industrial down 13%
  • Premium up 2%

2021 Outlook
"During the quarter our service product and lower cost structure enabled us to win new business and develop opportunities to grow," Fritz said. "There are many more growth opportunities to capture by also helping our customers efficiently and reliably reduce the carbon intensity of their supply chains. When we add improved safety results, we create strong value for all of our stakeholders."

First Quarter 2021 Earnings Conference Call
Union Pacific will webcast its first quarter 2021 earnings release presentation live at www.up.com/investor and via teleconference on Thursday, April 22, 2021, at 8:45 a.m. Eastern Time. Participants may join the conference call by dialing 877-407-8293 (or for international participants, 201-689-8349).

ABOUT UNION PACIFIC
Union Pacific (NYSE: UNP) delivers the goods families and businesses use every day with safe, reliable and efficient service. Operating in 23 western states, the company connects its customers and communities to the global economy. Trains are the most environmentally responsible way to move freight, helping Union Pacific protect future generations. More information about Union Pacific is available at www.up.com.

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 2020, which was filed with the SEC on February 5, 2021. 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,

2021

2020

%


 Operating Revenues







      Freight revenues

$

4,649

$

4,880

(5)

%

      Other


352


349

1


 Total operating revenues


5,001


5,229

(4)


 Operating Expenses







      Compensation and benefits


1,026


1,059

(3)


      Depreciation


549


547

-


      Purchased services and materials


490


521

(6)


      Fuel


411


434

(5)


      Equipment and other rents


212


227

(7)


      Other


320


298

7


 Total operating expenses


3,008


3,086

(3)


 Operating Income


1,993


2,143

(7)


      Other income, net


51


53

(4)


      Interest expense


(290)


(278)

4


 Income before income taxes


1,754


1,918

(9)


 Income taxes


(413)


(444)

(7)


 Net Income

$

1,341

$

1,474

(9)

%








 Share and Per Share







      Earnings per share - basic

$

2.01

$

2.15

(7)

%

      Earnings per share - diluted

$

2.00

$

2.15

(7)


      Weighted average number of shares - basic


667.6


684.3

(2)


      Weighted average number of shares - diluted


669.2


686.2

(2)


      Dividends declared per share

$

0.97

$

0.97

-









 Operating Ratio


60.1%


59.0%

1.1

pts

 Effective Tax Rate


23.5%


23.1%

0.4

pts

 

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Freight Revenues Statistics (unaudited) 
















1st Quarter

 For the Periods Ended March 31,

2021

2020

%


 Freight Revenues (Millions)







      Grain & grain products

$

766

$

689

11

%

      Fertilizer


170


174

(2)


      Food & refrigerated


235


250

(6)


      Coal & renewables


341


421

(19)


    Bulk


1,512


1,534

(1)


      Industrial chemicals & plastics


435


495

(12)


      Metals & minerals


375


469

(20)


      Forest products


316


303

4


      Energy & specialized markets


530


627

(15)


    Industrial


1,656


1,894

(13)


      Automotive


447


524

(15)


      Intermodal


1,034


928

11


    Premium


1,481


1,452

2


 Total

$

4,649

$

4,880

(5)

%

 Revenue Carloads (Thousands)







      Grain & grain products


203


175

16

%

      Fertilizer


44


46

(4)


      Food & refrigerated


45


48

(6)


      Coal & renewables


174


208

(16)


    Bulk


466


477

(2)


      Industrial chemicals & plastics


140


154

(9)


      Metals & minerals


146


174

(16)


      Forest products


60


56

7


      Energy & specialized markets


139


162

(14)


    Industrial


485


546

(11)


      Automotive


180


208

(13)


      Intermodal [a]


796


709

12


    Premium


976


917

6


 Total


1,927


1,940

(1)

%

 Average Revenue per Car







      Grain & grain products

$

3,782

$

3,940

(4)

%

      Fertilizer


3,852


3,768

2


      Food & refrigerated


5,234


5,277

(1)


      Coal & renewables


1,958


2,022

(3)


    Bulk


3,246


3,219

1


      Industrial chemicals & plastics


3,113


3,205

(3)


      Metals & minerals


2,563


2,697

(5)


      Forest products


5,244


5,457

(4)


      Energy & specialized markets


3,828


3,866

(1)


    Industrial


3,417


3,469

(1)


      Automotive


2,485


2,525

(2)


      Intermodal [a]


1,299


1,307

(1)


    Premium


1,517


1,583

(4)


 Average 

$

2,413

$

2,516

(4)

%


[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

2021

2020

 Assets





      Cash and cash equivalents

$

1,183

$

1,799

      Short-term investments


60


60

      Other current assets


2,476


2,355

      Investments


2,167


2,164

      Properties, net


54,062


54,161

      Operating lease assets


1,581


1,610

      Other assets


264


249

 Total assets

$

61,793

$

62,398






 Liabilities and Common Shareholders' Equity





      Debt due within one year

$

1,565

$

1,069

      Other current liabilities


3,306


3,104

      Debt due after one year


25,117


25,660

      Operating lease liabilities


1,171


1,283

      Deferred income taxes


12,307


12,247

      Other long-term liabilities


2,073


2,077

 Total liabilities


45,539


45,440

 Total common shareholders' equity


16,254


16,958

 Total liabilities and common shareholders' equity

$

61,793

$

62,398

 

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Condensed Consolidated Statements of Cash Flows (unaudited)











 Millions,

Year-to-Date

 For the Periods Ended March 31,

2021

2020

 Operating Activities





      Net income

$

1,341

$

1,474

      Depreciation


549


547

      Deferred income taxes


54


91

      Other - net


14


43

 Cash provided by operating activities


1,958


2,155

 Investing Activities





      Capital investments


(536)


(807)

      Maturities of short-term investments


24


70

      Purchases of short-term investments


(24)


(70)

      Other - net


31


-

 Cash used in investing activities


(505)


(807)

 Financing Activities





      Share repurchase programs


(1,347)


(2,556)

      Dividends paid


(650)


(660)

      Debt repaid


(47)


(305)

      Net issuance of commercial paper


(15)


(1)

      Debt issued


-


2,996

      Accelerated share repurchase programs pending final settlement


-


(400)

      Other - net


(14)


(71)

 Cash used in financing activities


(2,073)


(997)

 Net Change in Cash, Cash Equivalents and Restricted Cash


(620)


351

 Cash, cash equivalents, and restricted cash at beginning of year


1,818


856

 Cash, Cash Equivalents, and Restricted Cash at End of Period

$

1,198

$

1,207

 Free Cash Flow*





      Cash provided by operating activities

$

1,958

$

2,155

      Cash used in investing activities


(505)


(807)

      Dividends paid


(650)


(660)

 Free cash flow

$

803

$

688



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,

2021


2020

%


 Operating/Performance Statistics 






      Freight car velocity (daily miles per car) [a]

209


211

(1)

%

      Average train speed (miles per hour) *

25.2


25.4

(1)


      Average terminal dwell time (hours) *

23.5


23.8

(1)


      Locomotive productivity (GTMs per horsepower day)

138


131

5


      Gross ton-miles (GTMs) (millions)

193,087


201,297

(4)


      Train length (feet)

9,247


8,396

10


      Intermodal car trip plan compliance (%)

77


85

(8)

pts

      Manifest/Automotive car trip plan compliance (%)

68


64

4

pts

      Workforce productivity (car miles per employee)

1,002


894

12


      Total employees (average)

29,755


33,872

(12)








 Locomotive Fuel Statistics






      Average fuel price per gallon consumed

$ 1.85


$ 1.87

(1)

%

      Fuel consumed in gallons (millions)

216


225

(4)


      Fuel consumption rate**

1.119


1.117

-








 Revenue Ton-Miles (Millions)






      Grain & grain products

20,348


16,111

26

%

      Fertilizer

2,995


3,044

(2)


      Food & refrigerated

4,498


4,506

-


      Coal & renewables

17,536


20,005

(12)


    Bulk

45,377


43,666

4


      Industrial chemicals & plastics

7,055


7,174

(2)


      Metals & minerals

6,876


8,533

(19)


      Forest products

6,318


6,041

5


      Energy & specialized markets

9,590


12,046

(20)


    Industrial

29,839


33,794

(12)


      Automotive

3,773


4,489

(16)


      Intermodal

18,375


17,734

4


    Premium

22,148


22,223

-


 Total

97,364


99,683

(2)

%







[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]

2021

2020

 Net income

$

5,216

$

5,349

 Add:





 Income tax expense


1,600


1,631

 Depreciation


2,212


2,210

 Interest expense


1,153


1,141

 EBITDA

$

10,181

$

10,331

 Adjustments:





 Other income, net


(285)


(287)

 Interest on operating lease liabilities**


53


59

 Adjusted EBITDA

$

9,949

$

10,103

 Debt

$

26,682

$

26,729

 Operating lease liabilities


1,465


1,604

 Unfunded pension and OPEB, net of taxes of $190 and $195


619


637

 Adjusted debt

$

28,766

$

28,970

 Adjusted debt / Adjusted EBITDA


2.9


2.9






Comparable Adjusted Debt / Adjusted EBITDA*






Mar. 31,

Dec. 31,

for the Trailing Twelve Months Ended [a]

2021

2020

 Adjusted debt / Adjusted EBITDA


2.9


2.9

 Factors Affecting Comparability:





Brazos yard impairment [b]


(0.1)


(0.1)

 Comparable Adjusted Debt / Adjusted EBITDA*

2.8

2.8



[a]

The trailing twelve months income statement information ended March 31, 2021, is recalculated by taking the twelve months ended December 31, 2020, subtracting the three months ended March 31, 2020, and adding the three months ended March 31, 2021.

[b]

Adjustments remove the impact of $209 million from net income and $69 million from income tax expense for the year ended December 31, 2020. See page 7 for a reconciliation to GAAP.



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, net and interest on operating lease liabilities. Adjusted debt to adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and adjustments for other income, net and interest on operating lease liabilities) and comparable adjusted debt to adjusted EBITDA are considered non-GAAP financial measures 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 these measures are 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 and comparable 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 and comparable adjusted debt to adjusted EBITDA. At March 31, 2021, and December 31, 2020, the incremental borrowing rate on operating leases was 3.6% and 3.7%, respectively.



** 

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.

 

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Non-GAAP Measures Reconciliation to GAAP











Financial Performance*










 Millions, Except Per Share Amounts and Percentages


Reported results


Brazos Yard


Adjusted results


(GAAP)

Impairment

(non-GAAP)

 For the Year Ended December 31, 2020










 Income taxes

$

1,631


$

69


$

1,700


 Net income

$

5,349


$

209


$

5,558




The above table reconciles our results for the year ended December 31, 2020, to adjusted results that exclude the impact of certain items identified as affecting comparability. We use adjusted income taxes and adjusted net income, as applicable, among other measures, to evaluate our actual operating performance. We believe these non-GAAP financial measures provide valuable information regarding earnings and business trends by excluding specific items that we believe are not indicative of our ongoing operating results of our business, providing a useful way for investors to make a comparison of our performance over time and against other companies in our industry. Since these are not measures of performance calculated in accordance with GAAP, they should be considered in addition to, rather than as a substitute for, income taxes and net income.

 

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