- Second quarter earnings per diluted share of $2.74, up 7%
- Second quarter operating income up 9%
- Second quarter net income up 7%
Union Pacific Corporation (NYSE: UNP) today reported 2024 second
quarter net income of $1.7 billion, or $2.74 per diluted share.
This compares to 2023 second quarter net income of $1.6 billion, or
$2.57 per diluted share.
“Our second quarter performance demonstrates the team’s ability
to deliver strong results,” said Jim Vena, Union Pacific Chief
Executive Officer. “This provides further proof that our strategy
to be the best in safety, service, and operational excellence will
drive success. The entire Union Pacific team is energized behind
this strategy and wants to win. As we build on the foundation we’ve
laid over the past 12 months, we look forward to demonstrating
what’s possible for our great company.”
Second Quarter Summary: 2024 vs. 2023
Financial Results: Solid Operating Income Growth Driven by
Core Pricing Gains, Operating Efficiency, and Intermodal Equipment
Sale
- Operating revenue of $6.0 billion was up 1% driven by core
pricing gains and increased volume partially offset by business mix
and reduced fuel surcharge.
- Freight revenue excluding fuel surcharge revenue grew 2% as
revenue carloads grew slightly.
- Operating ratio was 60.0%, an improvement of 300 basis points.
Lower quarterly fuel prices and an existing environmental
remediation compliance order negatively impacted the operating
ratio 10 and 30 basis points, respectively. A sale of intermodal
equipment aided the operating ratio 70 basis points.
- Operating income of $2.4 billion was up 9%.
Operating Performance: Continued Improvement Across Safety
and Operational Excellence as Network Challenged by Weather
- Union Pacific’s year-to-date reportable personal injury and
reportable derailment rates both improved.
- Quarterly freight car velocity of 201 daily miles per car was
flat.
- Quarterly locomotive productivity was 134 gross ton-miles
(GTMs) per horsepower day, a 6% improvement.
- Average maximum train length was 9,544 feet, a 2%
increase.
- Quarterly workforce productivity improved 5% to 1,031 car miles
per employee.
- Fuel consumption rate of 1.080, measured in gallons of fuel per
thousand GTMs, improved 1%.
2024 Outlook
Updated
- Second half volume outlook remains uncertain based on economic
indicators and coal demand
- Profitability outlook continues positive momentum with strong
service product, improving network efficiency, and solid
pricing
- Share repurchases of ~$1.5 billion in 2024
Affirmed
- Pricing dollars in excess of inflation dollars
- No change to long-term capital allocation strategy
- Capital plan of $3.4 billion
Second Quarter 2024 Earnings Conference Call
Union Pacific will webcast its second quarter 2024 earnings
release presentation live at https://investor.unionpacific.com and
via teleconference on Thursday, July 25, 2024, 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 potential
impacts of public health crises, including pandemics, epidemics and
the outbreak of other contagious diseases, such as the coronavirus
and its variant strains (COVID); the Russia-Ukraine and
Israel-Hamas wars and other geopolitical tensions in the middle
east, and any impacts on our business operations, financial
results, liquidity, and financial position, and on the world
economy (including customers, employees, and supply chains),
including as a result of fluctuations in volume and carloadings;
expectations as to general macroeconomic conditions, including
slowdowns and recessions, domestically or internationally, and
volatility in interest rates and fuel prices; closing of customer
manufacturing, distribution, or production facilities; expectations
as to operational or service improvements; expectations as to
hiring challenges; availability of employees; expectations
regarding the effectiveness of steps taken or to be taken to
improve operations, service, infrastructure improvements, and
transportation plan modifications; expectations as to cost savings,
revenue growth, and earnings; the time by which goals, targets, or
objectives will be achieved; projections, predictions,
expectations, estimates, or forecasts as to business, financial,
and operational results, future economic performance, and general
economic conditions; proposed new products and services; estimates
of costs relating to environmental remediation and restoration;
estimates and expectations regarding tax matters; expectations that
claims, litigation, environmental costs, commitments, contingent
liabilities, labor negotiations or agreements, cyberattacks or
other matters. 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 2023, which was filed with the SEC
on February 9, 2024. 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 the Company’s 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
2nd Quarter
Year-to-Date
Percentages, For the Periods Ended June
30,
2024
2023
%
2024
2023
%
Operating Revenues
Freight revenues
$
5,638
$
5,569
1
%
$
11,254
$
11,225
-
%
Other revenues
369
394
(6
)
784
794
(1
)
Total operating revenues
6,007
5,963
1
12,038
12,019
-
Operating Expenses
Compensation and benefits
1,187
1,269
(6
)
2,410
2,448
(2
)
Fuel
625
664
(6
)
1,283
1,430
(10
)
Purchased services and materials
644
650
(1
)
1,257
1,303
(4
)
Depreciation
596
577
3
1,190
1,149
4
Equipment and other rents
219
248
(12
)
435
483
(10
)
Other
336
351
(4
)
691
708
(2
)
Total operating expenses
3,607
3,759
(4
)
7,266
7,521
(3
)
Operating Income
2,400
2,204
9
4,772
4,498
6
Other income, net
103
93
11
195
277
(30
)
Interest expense
(319
)
(339
)
(6
)
(643
)
(675
)
(5
)
Income before income taxes
2,184
1,958
12
4,324
4,100
5
Income tax expense
(511
)
(389
)
31
(1,010
)
(901
)
12
Net Income
$
1,673
$
1,569
7
%
$
3,314
$
3,199
4
%
Share and Per Share
Earnings per share - basic
$
2.75
$
2.58
7
%
$
5.44
$
5.25
4
%
Earnings per share - diluted
$
2.74
$
2.57
7
$
5.43
$
5.24
4
Weighted average number of shares -
basic
609.4
608.7
-
609.3
609.6
-
Weighted average number of shares -
diluted
610.3
609.5
-
610.3
610.5
-
Dividends declared per share
$
1.30
$
1.30
-
$
2.60
$
2.60
-
Operating Ratio
60.0
%
63.0
%
(3.0)
pts
60.4
%
62.6
%
(2.2)
pts
Effective Tax Rate
23.4
%
19.9
%
3.5
pts
23.4
%
22.0
%
1.4
pts
UNION PACIFIC CORPORATION AND
SUBSIDIARY COMPANIES
Freight Revenues Statistics
(unaudited)
2nd Quarter
Year-to-Date
For the Periods Ended June 30,
2024
2023
%
2024
2023
%
Freight Revenues (Millions)
Grain & grain products
$
901
$
890
1
%
$
1,844
$
1,833
1
%
Fertilizer
203
183
11
404
369
9
Food & refrigerated
278
255
9
563
518
9
Coal & renewables
339
429
(21
)
727
934
(22
)
Bulk
1,721
1,757
(2
)
3,538
3,654
(3
)
Industrial chemicals & plastics
593
545
9
1,165
1,081
8
Metals & minerals
530
562
(6
)
1,045
1,098
(5
)
Forest products
342
347
(1
)
680
679
-
Energy & specialized markets
658
632
4
1,337
1,245
7
Industrial
2,123
2,086
2
4,227
4,103
3
Automotive
659
625
5
1,270
1,212
5
Intermodal
1,135
1,101
3
2,219
2,256
(2
)
Premium
1,794
1,726
4
3,489
3,468
1
Total
$
5,638
$
5,569
1
%
$
11,254
11,225
-
%
Revenue Carloads (Thousands)
Grain & grain products
200
197
2
%
410
399
3
%
Fertilizer
62
48
29
109
93
17
Food & refrigerated
46
44
5
92
88
5
Coal & renewables
158
203
(22
)
335
419
(20
)
Bulk
466
492
(5
)
946
999
(5
)
Industrial chemicals & plastics
169
164
3
333
321
4
Metals & minerals
184
210
(12
)
354
398
(11
)
Forest products
55
55
-
108
107
1
Energy & specialized markets
147
144
2
301
283
6
Industrial
555
573
(3
)
1,096
1,109
(1
)
Automotive
218
213
2
425
413
3
Intermodal [a]
798
749
7
1,537
1,483
4
Premium
1,016
962
6
1,962
1,896
3
Total
2,037
2,027
-
%
4,004
4,004
-
%
Average Revenue per Car
Grain & grain products
$
4,493
$
4,527
(1
)%
$
4,493
$
4,598
(2
)%
Fertilizer
3,311
3,830
(14
)
3,727
3,978
(6
)
Food & refrigerated
5,943
5,740
4
6,086
5,851
4
Coal & renewables
2,156
2,107
2
2,173
2,228
(2
)
Bulk
3,692
3,568
3
3,740
3,657
2
Industrial chemicals & plastics
3,507
3,336
5
3,497
3,368
4
Metals & minerals
2,885
2,677
8
2,955
2,760
7
Forest products
6,249
6,337
(1
)
6,272
6,360
(1
)
Energy & specialized markets
4,462
4,388
2
4,439
4,398
1
Industrial
3,825
3,646
5
3,855
3,701
4
Automotive
3,033
2,928
4
2,991
2,935
2
Intermodal [a]
1,421
1,471
(3
)
1,444
1,521
(5
)
Premium
1,766
1,794
(2
)
1,779
1,829
(3
)
Average
$
2,768
$
2,748
1
%
$
2,811
$
2,804
-
%
[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
2024
2023
Assets
Cash and cash equivalents
$
1,137
$
1,055
Short-term investments
20
16
Other current assets
3,341
3,077
Investments
2,705
2,605
Properties, net
57,835
57,398
Operating lease assets
1,386
1,643
Other assets
1,393
1,338
Total assets
$
67,817
$
67,132
Liabilities and Common Shareholders'
Equity
Debt due within one year
$
727
$
1,423
Other current liabilities
3,560
3,683
Debt due after one year
31,165
31,156
Operating lease liabilities
988
1,245
Deferred income taxes
13,166
13,123
Other long-term liabilities
1,722
1,714
Total liabilities
51,328
52,344
Total common shareholders' equity
16,489
14,788
Total liabilities and common shareholders'
equity
$
67,817
$
67,132
UNION PACIFIC CORPORATION AND
SUBSIDIARY COMPANIES
Condensed Consolidated Statements of Cash
Flows (unaudited)
Year-to-Date
Millions, for the Periods Ended June
30,
2024
2023
Operating Activities
Net income
$
3,314
$
3,199
Depreciation
1,190
1,149
Deferred and other income taxes
43
36
Other - net
(514
)
(526
)
Cash provided by operating activities
4,033
3,858
Investing Activities
Capital investments*
(1,699
)
(1,607
)
Other - net
107
(67
)
Cash used in investing activities
(1,592
)
(1,674
)
Financing Activities
Debt repaid
(1,807
)
(1,664
)
Dividends paid
(1,588
)
(1,588
)
Debt issued
800
1,599
Net issued/(paid) of commercial paper
297
19
Share repurchase programs
(100
)
(705
)
Other - net
30
11
Cash used in financing activities
(2,368
)
(2,328
)
Net change in cash, cash equivalents, and
restricted cash
73
(144
)
Cash, cash equivalents, and restricted
cash at beginning of year
1,074
987
Cash, cash equivalents, and restricted
cash at end of period
$
1,147
$
843
Free Cash Flow**
Cash provided by operating activities
$
4,033
$
3,858
Cash used in investing activities
(1,592
)
(1,674
)
Dividends paid
(1,588
)
(1,588
)
Free cash flow
$
853
$
596
*
Capital investments include locomotive and
freight car early lease buyouts of $96 million in 2024 and $14
million in 2023.
**
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,
2024
2023
%
2024
2023
%
Operating/Performance
Statistics
Freight car velocity (daily miles per
car)*
201
202
-
%
202
199
2
%
Average train speed (miles per hour)*
23.3
24.1
(3
)
23.7
24.1
(2
)
Average terminal dwell time (hours)*
22.7
23.3
(3
)
23.1
23.6
(2
)
Locomotive productivity (GTMs per
horsepower day)
134
126
6
134
125
7
Gross ton-miles (GTMs) (millions)
206,806
207,606
-
412,835
414,254
-
Train length (feet)
9,544
9,316
2
9,415
9,238
2
Intermodal service performance index
(%)
93
89
4
pts
93
85
8
pts
Manifest/Automotive service performance
index (%)
84
84
-
pts
85
82
3
pts
Intermodal car trip plan compliance
(%)**
83
79
4
pts
83
76
7
pts
Manifest/Automotive car trip plan
compliance (%)**
64
64
-
pts
65
63
2
pts
Workforce productivity (car miles per
employee)
1,031
978
5
1,015
983
3
Total employees (average)
30,556
32,243
(5
)
30,804
31,888
(3
)
Locomotive Fuel Statistics
Average fuel price per gallon consumed
$
2.73
$
2.86
(5
)%
$
2.77
$
3.04
(9
)%
Fuel consumed in gallons (millions)
223
226
(1
)
453
458
(1
)
Fuel consumption rate***
1.080
1.086
(1
)
1.097
1.105
(1
)
Revenue Ton-Miles (Millions)
Grain & grain products
19,995
18,858
6
%
40,644
38,902
4
%
Fertilizer
3,570
2,953
21
6,857
6,089
13
Food & refrigerated
4,693
4,514
4
9,610
9,057
6
Coal & renewables
16,351
20,864
(22
)
35,234
43,361
(19
)
Bulk
44,609
47,189
(5
)
92,345
97,409
(5
)
Industrial chemicals & plastics
8,069
7,214
12
15,496
14,305
8
Metals & minerals
8,301
9,209
(10
)
16,366
18,156
(10
)
Forest products
5,663
5,815
(3
)
11,243
11,364
(1
)
Energy & specialized markets
10,229
9,817
4
20,815
19,316
8
Industrial
32,262
32,055
1
63,920
63,141
1
Automotive
4,879
4,687
4
9,415
9,087
4
Intermodal
18,242
17,567
4
35,577
35,687
-
Premium
23,121
22,254
4
44,992
44,774
-
Total
99,992
101,498
(1
)%
201,257
205,324
(2
)%
*
Surface Transportation Board (STB)
reported performance measures.
**
Methodology used to report is not
comparable with the reporting to the STB under docket number EP
770.
***
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)
2024
Millions, Except Per Share Amounts and
Percentages,
1st Qtr
2nd Qtr
Year-to-Date
Operating Revenues
Freight revenues
$
5,616
$
5,638
$
11,254
Other revenues
415
369
784
Total operating revenues
6,031
6,007
12,038
Operating Expenses
Compensation and benefits
1,223
1,187
2,410
Fuel
658
625
1,283
Purchased services and materials
613
644
1,257
Depreciation
594
596
1,190
Equipment and other rents
216
219
435
Other
355
336
691
Total operating expenses
3,659
3,607
7,266
Operating Income
2,372
2,400
4,772
Other income, net
92
103
195
Interest expense
(324
)
(319
)
(643
)
Income before income taxes
2,140
2,184
4,324
Income tax expense
(499
)
(511
)
(1,010
)
Net Income
$
1,641
$
1,673
$
3,314
Share and Per Share
Earnings per share - basic
$
2.69
$
2.75
$
5.44
Earnings per share - diluted
$
2.69
$
2.74
$
5.43
Weighted average number of shares -
basic
609.2
609.4
609.3
Weighted average number of shares -
diluted
610.2
610.3
610.3
Dividends declared per share
$
1.30
$
1.30
$
2.60
Operating Ratio
60.7
%
60.0
%
60.4
%
Effective Tax Rate
23.3
%
23.4
%
23.4
%
UNION PACIFIC CORPORATION AND
SUBSIDIARY COMPANIES
Freight Revenue Statistics (unaudited)
2024
1st Qtr
2nd Qtr
Year-to-Date
Freight Revenues (Millions)
Grain & grain products
$
943
$
901
$
1,844
Fertilizer
201
203
404
Food & refrigerated
285
278
563
Coal & renewables
388
339
727
Bulk
1,817
1,721
3,538
Industrial chemicals & plastics
572
593
1,165
Metals & minerals
515
530
1,045
Forest products
338
342
680
Energy & specialized markets
679
658
1,337
Industrial
2,104
2,123
4,227
Automotive
611
659
1,270
Intermodal
1,084
1,135
2,219
Premium
1,695
1,794
3,489
Total
$
5,616
$
5,638
$
11,254
Revenue Carloads (Thousands)
Grain & grain products
210
200
410
Fertilizer
47
62
109
Food & refrigerated
46
46
92
Coal & renewables
177
158
335
Bulk
480
466
946
Industrial chemicals & plastics
164
169
333
Metals & minerals
170
184
354
Forest products
53
55
108
Energy & specialized markets
154
147
301
Industrial
541
555
1,096
Automotive
207
218
425
Intermodal [a]
739
798
1,537
Premium
946
1,016
1,962
Total
1,967
2,037
4,004
Average Revenue per Car
Grain & grain products
$
4,494
$
4,493
$
4,493
Fertilizer
4,271
3,311
3,727
Food & refrigerated
6,231
5,943
6,086
Coal & renewables
2,189
2,156
2,173
Bulk
3,787
3,692
3,740
Industrial chemicals & plastics
3,486
3,507
3,497
Metals & minerals
3,030
2,885
2,955
Forest products
6,297
6,249
6,272
Energy & specialized markets
4,416
4,462
4,439
Industrial
3,886
3,825
3,855
Automotive
2,947
3,033
2,991
Intermodal [a]
1,468
1,421
1,444
Premium
1,792
1,766
1,779
Average
$
2,855
$
2,768
$
2,811
[a]
For intermodal shipments each container or
trailer equals one carload.
UNION PACIFIC CORPORATION AND
SUBSIDIARY COMPANIES
Non-GAAP Measures Reconciliation to GAAP
(unaudited)
Debt / Net Income
Millions, Except Ratios
Jun. 30,
Dec. 31,
for the Trailing Twelve Months Ended
[a]
2024
2023
Debt
$
31,892
$
32,579
Net income
6,494
6,379
Debt / net income
4.9
5.1
Adjusted Debt / Adjusted
EBITDA*
Millions, Except Ratios
Jun. 30,
Dec. 31,
for the Trailing Twelve Months Ended
[a]
2024
2023
Net income
$
6,494
$
6,379
Add:
Income tax expense
1,963
1,854
Depreciation
2,359
2,318
Interest expense
1,308
1,340
EBITDA
$
12,124
$
11,891
Adjustments:
Other income, net
(409
)
(491
)
Interest on operating lease liabilities
[b]
48
58
Adjusted EBITDA
$
11,763
$
11,458
Debt
$
31,892
$
32,579
Operating lease liabilities
1,305
1,600
Adjusted debt
$
33,197
$
34,179
Adjusted debt / adjusted EBITDA
2.8
3.0
[a]
The trailing twelve months income
statement information ended June 30, 2024, is recalculated by
taking the twelve months ended December 31, 2023, subtracting the
six months ended June 30, 2023, and adding the six months ended
June 30, 2024.
[b]
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.
*
Adjusted debt (total debt plus operating
lease liabilities plus after-tax unfunded pension and OPEB (other
post retirement benefit) obligations) to adjusted EBITDA (earnings
before interest, taxes, depreciation, amortization, and adjustments
for other income 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, other information
provided in accordance with GAAP. The most comparable GAAP measure
is debt to net income ratio. The tables above provide
reconciliations from net income to adjusted EBITDA, debt to
adjusted debt, and debt to net income to adjusted debt to adjusted
EBITDA. At June 30, 2024, and December 31, 2023, the incremental
borrowing rate on operating leases was 3.7% and 3.6%, respectively.
Pension and OPEB were funded at June 30, 2024, and December 31,
2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240725524681/en/
Union Pacific Investor contact: Brad Stock at
402-544-4227 or bkstock@up.com Union Pacific Media contact:
Clarissa Beyah at 402-957-4793 or cbeyah@up.com
Union Pacific (NYSE:UNP)
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