Union Pacific Reports First Quarter 2022 Results

News provided by

Union Pacific Corporation

Apr 21, 2022, 07:45 ET

  • 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.

SOURCE Union Pacific Corporation

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

icon3
440k+
Newsrooms &
Influencers
icon1
9k+
Digital Media
Outlets
icon2
270k+
Journalists
Opted In
GET STARTED