Union Pacific Reports First Quarter Results

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIESCondensed Consolidated Statements of Income (unaudited)

 Millions, Except Per Share Amounts and Percentages,

1st Quarter

 For the Periods Ended March 31,

2015

2014

%

 Operating Revenues

      Freight revenues

$

5,251

$

5,286

(1)%

      Other revenues

363

352

3

 Total operating revenues

5,614

5,638

-

 Operating Expenses

      Compensation and benefits

1,369

1,254

9

      Purchased services and materials

643

607

6

      Fuel

564

921

(39)

      Depreciation

491

464

6

      Equipment and other rents

311

312

-

      Other

259

226

15

 Total operating expenses

3,637

3,784

(4)

 Operating Income

1,977

1,854

7

      Other income

26

38

(32)

      Interest expense

(148)

(133)

11

 Income before income taxes

1,855

1,759

5

 Income taxes

(704)

(671)

5

 Net Income

$

1,151

$

1,088

6%

 Share and Per Share*

      Earnings per share - basic

$

1.31

$

1.20

9%

      Earnings per share - diluted

$

1.30

$

1.19

9

      Weighted average number of shares - basic

879.3

908.1

(3)

      Weighted average number of shares - diluted

882.8

912.5

(3)

      Dividends declared per share

$

0.55

$

0.455

21

 Operating Ratio

64.8%

67.1%

(2.3) pts

 Effective Tax Rate

38.0%

38.1%

(0.1) pts

*   

On June 6, 2014, we completed a two-for-one stock split, effected in the form of a 100% stock dividend. All references to common shares and per share amounts have been retroactively adjusted to reflect the stock split for all periods presented.

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIESFreight Revenues Statistics (unaudited)

1st Quarter

 For the Periods Ended March 31,

2015

2014

%

 Freight Revenues (Millions)

 Agricultural Products

$

939

$

910

3%

 Automotive

516

488

6

 Chemicals

897

893

-

 Coal

915

961

(5)

 Industrial Products

1,017

1,011

1

 Intermodal

967

1,023

(5)

 Total

$

5,251

$

5,286

(1)%

 Revenue Carloads (Thousands)

 Agricultural Products

245

239

3%

 Automotive

202

188

7

 Chemicals

267

270

(1)

 Coal

399

430

(7)

 Industrial Products

306

314

(3)

 Intermodal*

812

833

(3)

 Total

2,231

2,274

(2)%

 Average Revenue per Car

 Agricultural Products

$

3,838

$

3,815

1%

 Automotive

2,553

2,591

(1)

 Chemicals

3,362

3,307

2

 Coal

2,293

2,236

3

 Industrial Products

3,325

3,218

3

 Intermodal*

1,191

1,227

(3)

 Average 

$

2,354

$

2,324

1%

*

Each intermodal container or trailer equals one carload.

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIESCondensed Consolidated Statements of Financial Position (unaudited)

Mar. 31,

Dec. 31,

 Millions, Except Percentages

2015

2014

 Assets

      Cash and cash equivalents

$

1,587

$

1,586

      Other current assets

2,892

3,093

      Investments

1,375

1,390

      Net properties

46,928

46,272

      Other assets

363

375

 Total assets

$

53,145

$

52,716

 Liabilities and Common Shareholders' Equity

      Debt due within one year

$

416

$

462

      Other current liabilities

2,974

3,303

      Debt due after one year

11,884

11,018

      Deferred income taxes

14,774

14,680

      Other long-term liabilities

2,040

2,064

 Total liabilities

32,088

31,527

 Total common shareholders' equity

21,057

21,189

 Total liabilities and common shareholders' equity

$

53,145

$

52,716

 Debt to Capital

36.9%

35.1%

 Adjusted Debt to Capital*

42.6%

41.3%

*

Adjusted Debt to Capital is a non-GAAP measure; however, management believes that it is an important measure in evaluating our financial performance. See page 6 for a reconciliation to GAAP.

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIESCondensed Consolidated Statements of Cash Flows (unaudited)

 Millions,

Year-to-Date

 For the Periods Ended March 31,

2015

 Operating Activities

      Net income

$

1,151

$

1,088

      Depreciation

491

464

      Deferred income taxes

108

75

      Other - net

314

140

 Cash provided by operating activities

2,064

1,767

 Investing Activities

      Capital investments

(1,101)

(893)

      Other - net

(41)

(12)

 Cash used in investing activities

(1,142)

(905)

 Financing Activities

      Debt issued

1,146

995

      Common shares repurchased

(792)

(644)

      Debt repaid

(333)

(402)

      Dividends paid*

(922)

(363)

      Other - net

(20)

(23)

 Cash used in financing activities

(921)

(437)

 Net Change in Cash and Cash Equivalents

1

425

 Cash and cash equivalents at beginning of year

1,586

1,432

 Cash and Cash Equivalents at End of Period

$

1,587

$

1,857

 Free Cash Flow**

      Cash provided by operating activities

$

2,064

$

1,767

      Cash used in investing activities

(1,142)

(905)

      Dividends paid*

(922)

(363)

 Free cash flow

$

-

$

499

*   

The 2015 dividends paid amount includes the fourth quarter 2014 dividend of $438 million, which was paid on January 2, 2015, as well as the first quarter 2015 dividend of $484 million, which was paid on March 30, 2015.  Beginning in 2015, the timing of the dividend declaration and payable dates was aligned to occur within the same quarter.

**   

Free cash flow is a non-GAAP measure; however, management believes that it is an important measure in evaluating our financial performance and measures our ability to generate cash without additional external financing.

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIESOperating and Performance Statistics (unaudited)

1st Quarter

 For the Periods Ended March 31,

2015

 Operating/Performance Statistics 

      Gross ton-miles (GTMs) (millions)

237,213

240,169

(1)%

      Employees (average)

48,830

46,166

6

      GTMs (millions) per employee

4.86

5.20

(7)

 Locomotive Fuel Statistics

      Average fuel price per gallon consumed

$1.95

$3.12

(38)%

      Fuel consumed in gallons (millions)

282

287

(2)

      Fuel consumption rate*

1.187

1.197

(1)

 AAR Reported Performance Measures

      Average train speed (miles per hour)

24.6

24.5

-%

      Average terminal dwell time (hours)

30.6

30.7

-

 Revenue Ton-Miles (Millions)

      Agricultural Products

22,982

23,723

(3)%

      Automotive

4,293

3,958

8

      Chemicals

18,209

18,814

(3)

      Coal

41,710

44,683

(7)

      Industrial Products

20,168

20,425

(1)

      Intermodal

19,048

19,940

(4)

 Total

126,410

131,543

(4)%

*  

Fuel consumption is computed as follows: gallons of fuel consumed divided by gross ton-miles in thousands. 

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIESNon-GAAP Measures Reconciliation to GAAP

 Debt to Capital*

Mar. 31,

Dec. 31,

 Millions, Except Percentages

2015

2014

 Debt (a)

$

12,300

$

11,480

 Equity

21,057

21,189

 Capital (b)

$

33,357

$

32,669

 Debt to capital (a/b)

36.9%

35.1%

*   

Total debt divided by total debt plus equity. Management believes this is an important measure in evaluating our balance sheet strength and is important in managing our credit ratios and financing relationships.

 Adjusted Debt to Capital, Reconciliation to GAAP*

Mar. 31,

Dec. 31,

 Millions, Except Percentages

2015

2014

 Debt

$

12,300

$

11,480

 Net present value of operating leases

2,830

2,902

 Unfunded pension and OPEB

518

523

 Adjusted debt (a)

15,648

14,905

 Equity

21,057

21,189

 Adjusted capital (b)

$

36,705

$

36,094

 Adjusted debt to capital (a/b)

42.6%

41.3%

*   

Total debt plus net present value of operating leases plus after-tax unfunded pension and OPEB obligation divided by total debt plus net present value of operating leases plus after-tax unfunded pension and OPEB obligation plus equity. Operating leases were discounted using 4.9% at March 31, 2015, and 5.3% at December 31, 2014. The discount rate reflects our effective interest rate. Management believes this is an important measure in evaluating the total amount of leverage in our capital structure including off-balance sheet lease obligations.