Nebraska

Union Pacific Reports First Quarter 2022 Results

  • Earnings per diluted share of $2.57
  • Operating revenue up 17%
  • Operating income up 19%

OMAHA, Neb., April 21, 2022 /PRNewswire/ -- Union Pacific Corporation (NYSE: UNP) today reported 2022 first quarter net income of $1.6 billion, or $2.57 per diluted share. This compares to 2021 first quarter net income of $1.3 billion, or $2.00 per diluted share.

"Union Pacific translated revenue growth from a strong economy, our focused business development initiatives, core pricing gains, and positive business mix, into solid financial results," said Lance Fritz, Union Pacific chairman, president, and chief executive officer.  "Operationally, we did not meet expectations, which is having an impact on our customers. We are taking actions to improve resource utilization, increase crews and locomotives where needed, and reduce freight car inventory levels to restore fluidity."

Financial Results: Revenue Growth Drives First Quarter Records for Operating Revenue, Operating Income, Net Income, and Earnings Per Share
First Quarter 2022 Compared to First Quarter 2021

  • Operating revenue of $5.9 billion was up 17% driven by higher fuel surcharge revenue, volume growth, core pricing gains, and a positive business mix.
  • Business volumes, as measured by total revenue carloads, were up 4%.
  • Union Pacific's 59.4% operating ratio improved 70 basis points. Operating ratio included 160 basis points of positive impact from 2021 weather events.  Higher fuel prices negatively impacted the operating ratio 80 basis points.
  • Operating income of $2.4 billion was up 19%.
  • The company repurchased 11.0 million shares in first quarter 2022 at an aggregate cost of $2.8 billion.

Operating Performance: Operational Inefficiencies and Incidents Impacted Service and Productivity
First Quarter 2022 Compared to First Quarter 2021

  • Quarterly freight car velocity of 198 daily miles per car, a 5% decline.
  • Quarterly locomotive productivity was 130 gross ton-miles (GTMs) per horsepower day, a 6% decline.
  • Average maximum train length was flat.
  • Quarterly workforce productivity was 1,056 car miles per employee, a 5% improvement.
  • Fuel consumption rate, measured in gallons of fuel per thousand GTMs, was flat.
  • Union Pacific's reportable personal injury rate deteriorated to 0.97 per 200,000 employee-hours compared to 0.85 for 2021.

2022 Guidance

Updated

  • Operating ratio beginning with "55", up from ~55.5%
    • Pressure from rising fuel prices and current operational performance

Affirmed

  • Full year volume growth exceeding Industrial Production
  • Pricing gains in excess of inflation dollars
  • Incremental margins of mid-60%
  • Capital spending of $3.3 billion
  • Dividend payout target of 45% of earnings
  • Share repurchases in line with 2021

First Quarter 2022 Earnings Conference Call

Union Pacific will webcast its first quarter 2022 earnings release presentation live at www.up.com/investor and via teleconference on Thursday, April 21, 2022, 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 (including those in response to increased traffic), its results of operations, and potential impacts of the COVID-19 pandemic and the Russian-Ukraine conflict.  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 2021, which was filed with the SEC on February 4, 2022. 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,


2022



2021




%

Operating Revenues













     Freight revenues


$

5,440



$

4,649




17

%

     Other Revenues



420




352




19


Total operating revenues



5,860




5,001




17


Operating Expenses













     Compensation and benefits



1,101




1,026




7


     Fuel     



714




411




74


     Purchased services and materials



561




490




14


     Depreciation



555




549




1


     Equipment and other rents



215




212




1


     Other



337




320




5


Total operating expenses



3,483




3,008




16


Operating Income



2,377




1,993




19


     Other income, net



47




51




(8)


     Interest expense



(307)




(290)




6


Income before income taxes



2,117




1,754




21


Income taxes



(487)




(413)




18


Net Income


$

1,630



$

1,341




22

%














Share and Per Share













     Earnings per share - basic


$

2.58



$

2.01




28

%

     Earnings per share - diluted


$

2.57



$

2.00




29


     Weighted average number of shares - basic



632.2




667.6




(5)


     Weighted average number of shares - diluted



633.6




669.2




(5)


     Dividends declared per share


$

1.18



$

0.97




22















Operating Ratio



59.4

%



60.1

%



(0.7)

pts

Effective Tax Rate



23.0

%



23.5

%



(0.5)

pts

 

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Freight Revenues Statistics (unaudited)




1st Quarter


For the Periods Ended March 31,


2022



2021




%

Freight Revenues (Millions)













     Grain & grain products


$

877



$

766




14

%

     Fertilizer



180




170




6


     Food & refrigerated



267




235




14


     Coal & renewables



508




341




49


  Bulk



1,832




1,512




21


     Industrial chemicals & plastics



520




435




20


     Metals & minerals



485




375




29


     Forest products



364




316




15


     Energy & specialized markets



552




530




4


  Industrial



1,921




1,656




16


     Automotive



501




447




12


     Intermodal



1,186




1,034




15


  Premium



1,687




1,481




14


Total


$

5,440



$

4,649




17

%

Revenue Carloads (Thousands)













     Grain & grain products



205




203




1

%

     Fertilizer



45




44




2


     Food & refrigerated



47




45




4


     Coal & renewables



225




174




29


  Bulk



522




466




12


     Industrial chemicals & plastics



160




140




14


     Metals & minerals



182




146




25


     Forest products



64




60




7


     Energy & specialized markets



131




139




(6)


  Industrial



537




485




11


     Automotive



190




180




6


     Intermodal [a]



757




796




(5)


  Premium



947




976




(3)


Total



2,006




1,927




4

%

Average Revenue per Car













     Grain & grain products


$

4,269



$

3,782




13

%

     Fertilizer



4,016




3,852




4


     Food & refrigerated



5,637




5,234




8


     Coal & renewables



2,262




1,958




16


  Bulk



3,508




3,246




8


     Industrial chemicals & plastics



3,247




3,113




4


     Metals & minerals



2,660




2,563




4


     Forest products



5,672




5,244




8


     Energy & specialized markets



4,219




3,828




10


  Industrial



3,574




3,417




5


     Automotive



2,640




2,485




6


     Intermodal [a]



1,566




1,299




21


  Premium



1,782




1,517




17


Average


$

2,711



$

2,413




12

%

 [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


2022



2021


Assets









     Cash and cash equivalents


$

909



$

960


     Short-term investments



46




46


     Other current assets



2,921




2,545


     Investments



2,279




2,241


     Properties, net



55,064




54,871


     Operating lease assets



1,727




1,787


     Other assets



1,105




1,075


Total assets


$

64,051



$

63,525











Liabilities and Common Shareholders' Equity









     Debt due within one year


$

1,559



$

2,166


     Other current liabilities



3,903




3,578


     Debt due after one year



30,680




27,563


     Operating lease liabilities



1,291




1,429


     Deferred income taxes



12,739




12,675


     Other long-term liabilities



1,982




1,953


Total liabilities



52,154




49,364


Total common shareholders' equity



11,897




14,161


Total liabilities and common shareholders' equity


$

64,051



$

63,525


 

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES 

Condensed Consolidated Statements of Cash Flows (unaudited) 


Millions,


Year-to-Date


for the Periods Ended March 31,


2022



2021


Operating Activities









     Net income


$

1,630



$

1,341


     Depreciation



555




549


     Deferred income taxes



60




54


     Other - net



(9)




14


Cash provided by operating activities



2,236




1,958


Investing Activities









     Capital investments*



(848)




(536)


     Maturities of short-term investments



-




24


     Purchases of short-term investments



-




(24)


     Other - net



12




31


Cash used in investing activities



(836)




(505)


Financing Activities









     Debt issued



3,490




-


     Share repurchase programs



(2,743)




(1,347)


     Debt repaid



(866)




(47)


     Dividends paid



(743)




(650)


     Accelerated share repurchase programs pending final settlement



(440)




-


     Net issuance of commercial paper



(100)




(15)


     Other - net



(51)




(14)


Cash used in financing activities



(1,453)




(2,073)


Net Change in Cash, Cash Equivalents and Restricted Cash



(53)




(620)


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



983




1,818


Cash, cash equivalents, and restricted cash at end of period


$

930



$

1,198


Free Cash Flow**









     Cash provided by operating activities


$

2,236



$

1,958


     Cash used in investing activities



(836)




(505)


     Dividends paid



(743)




(650)


Free cash flow


$

657



$

803


*

Capital investments include locomotive and freight car early lease buyouts of $46 million in 2022 and $23 million in 2021.



**

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,


2022



2021




%

Operating/Performance Statistics













     Freight car velocity (daily miles per car)



198




209




(5)

%

     Average train speed (miles per hour) *



24.1




25.2




(4)


     Average terminal dwell time (hours) *



24.0




23.5




2


     Locomotive productivity (GTMs per horsepower day)



130




138




(6)


     Gross ton-miles (GTMs) (millions)



209,706




193,087




9


     Train length (feet)



9,205




9,247




-


     Intermodal car trip plan compliance (%)



71




77




(6)

pts

     Manifest/Automotive car trip plan compliance (%)



62




68




(6)

pts

     Workforce productivity (car miles per employee)



1,056




1,002




5


     Total employees (average)



30,189




29,755




1















  Locomotive Fuel Statistics













     Average fuel price per gallon consumed


$

2.95



$

1.85




59

%

     Fuel consumed in gallons (millions)



234




216




8


     Fuel consumption rate**



1.116




1.119




-















  Revenue Ton-Miles (Millions)













     Grain & grain products



21,029




20,348




3

%

     Fertilizer



3,151




2,995




5


     Food & refrigerated



4,702




4,498




5


     Coal & renewables



24,250




17,536




38


  Bulk



53,132




45,377




17


     Industrial chemicals & plastics



7,559




7,055




7


     Metals & minerals



8,745




6,876




27


     Forest products



6,625




6,318




5


     Energy & specialized markets



9,066




9,590




(5)


  Industrial



31,995




29,839




7


     Automotive



4,147




3,773




10


     Intermodal



17,918




18,375




(2)


  Premium



22,065




22,148




-


Total



107,192




97,364




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 

Non-GAAP Measures Reconciliation to GAAP 


Adjusted Debt / Adjusted EBITDA*






Millions, Except Ratios

Mar. 31,

Dec. 31,


for the Trailing Twelve Months Ended [a]

2022

2021


Net income

$

6,812

$

6,523


Add:






     Income tax expense/(benefit)


2,029


1,955


     Depreciation


2,214


2,208


     Interest expense


1,174


1,157


EBITDA

$

12,229

$

11,843


Adjustments:






     Other income, net


(293)


(297)


     Interest on operating lease liabilities**


51


56


Adjusted EBITDA

$

11,987

$

11,602


Debt

$

32,239

$

29,729


Operating lease liabilities


1,596


1,759


Unfunded/(funded) pension and other postretirement benefits,






net of tax cost/(benefit) of ($28) and ($21)


(92)


(72)


Adjusted debt

$

33,743

$

31,416


Adjusted debt / Adjusted EBITDA


2.8


2.7


[a]

The trailing twelve months income statement information ended March 31, 2022, is recalculated by taking the twelve months ended December 31, 2021, subtracting the three months ended March 31, 2021, and adding the three months ended March 31, 2022.



*

Total debt plus operating lease liabilities plus after-tax unfunded pension and other postretirement benefit obligations 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, and adjustments for 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 a reconciliation from net income to adjusted debt to adjusted EBITDA. At both March 31, 2022, and December 31, 2021, the incremental borrowing rate on operating lease liabilities was 3.2%.



**

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