Union Pacific Reports Third Quarter 2015 Results
OMAHA, Neb., Oct. 22, 2015 /PRNewswire/ --
Third Quarter Results
- Diluted earnings per share of $1.50 declined 2 percent.
- Operating income totaled $2.2 billion, down 5 percent.
- Operating ratio of 60.3 percent, improved 2 points.
Union Pacific Corporation (NYSE: UNP) today reported 2015 third quarter net income of $1.3 billion, or $1.50 per diluted share, compared to $1.4 billion, or $1.53 per diluted share, in the third quarter 2014.
"Total volumes decreased about 6 percent in the quarter, more than offsetting another quarter of solid core pricing gains," said Lance Fritz, Union Pacific chairman, president and chief executive officer. "On the cost side, we've made significant progress aligning our resources to current demand, and I am pleased to report a quarterly record operating ratio of 60.3 percent."
Third Quarter Summary
Operating revenue of $5.6 billion was down 10 percent in the third quarter 2015 compared to the third quarter 2014. Third quarter business volumes, as measured by total revenue carloads, declined about 6 percent compared to 2014. Volume declined in each of the Company's business groups with the exception of automotive. In addition:
- Quarterly freight revenue decreased 10 percent compared to the third quarter 2014, as volume declines, lower fuel surcharge revenue, and negative business mix more than offset core pricing gains.
- Union Pacific's 60.3 percent operating ratio was an all-time quarterly record, 2 points better than the third quarter 2014 and 1.1 points better than the previous all-time quarterly record set in the fourth quarter 2014. The operating ratio benefited by about 1.5 points from the net impact of lower fuel prices during the quarter.
- The $1.81 per gallon average quarterly diesel fuel price in the third quarter 2015 was 40 percent lower than the third quarter 2014.
- Quarterly train speed, as reported to the Association of American Railroads, was 25.6 mph, 8 percent faster compared with the third quarter 2014.
- The Company repurchased 13.8 million shares in the third quarter 2015 at an aggregate cost of more than $1.2 billion.
Summary of Third Quarter Freight Revenues
- Automotive flat
- Agricultural Products down 4 percent
- Chemicals down 6 percent
- Intermodal down 11 percent
- Industrial Products down 16 percent
- Coal down 18 percent
2015 Outlook
"We've made great progress in meeting this year's challenges," Fritz said. "As we finish 2015 and head toward next year, we continue to face many uncertainties. Energy prices, the consumer economy, grain markets and the strength of the U.S. dollar will all be key to future demand. Over the long term, we are well positioned to safely provide our customers with excellent service, while delivering strong value to our shareholders."
Third Quarter 2015 Earnings Conference Call
Union Pacific will host its third quarter 2015 earnings release presentation live over the Internet and via teleconference on Thursday, October 22, 2015 at 8:45 a.m. Eastern Time. The presentation will be webcast live over the internet on Union Pacific's website at www.up.com/investor. Alternatively, the webcast can be accessed directly through the following link. Participants may join the conference call by dialing 877/407-8293 (or for international participants, 201/689-8349).
ABOUT UNION PACIFIC
Union Pacific Railroad is the principal operating company of Union Pacific Corporation (NYSE: UNP). One of America's most recognized companies, Union Pacific Railroad connects 23 states in the western two-thirds of the country by rail, providing a critical link in the global supply chain. From 2005-2014, Union Pacific invested more than $31 billion in its network and operations to support America's transportation infrastructure. The railroad's diversified business mix includes Agricultural Products, Automotive, Chemicals, Coal, Industrial Products and Intermodal. Union Pacific serves many of the fastest-growing U.S. population centers, operates from all major West Coast and Gulf Coast ports to eastern gateways, connects with Canada's rail systems and is the only railroad serving all six major Mexico gateways. Union Pacific provides value to its roughly 10,000 customers by delivering products in a safe, reliable, fuel-efficient and environmentally responsible manner.
Supplemental financial information is attached.
This presentation and related materials contain statements about the Corporation's future that are not statements of historical fact, including specifically the statements regarding the Corporation's expectations with respect to economic conditions, government regulation, and demand levels; and its ability to generate financial returns, improve network performance and cost efficiency, and provide returns to its shareholders. These statements are, or will be, forward-looking statements as defined by the Securities Act of 1933 and 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 Corporation'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 Corporation'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 Corporation'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 Corporation's Annual Report on Form 10-K for 2014, which was filed with the SEC on February 6, 2015. The Corporation 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 Corporation 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 Corporation does update one or more forward-looking statements, no inference should be drawn that the Corporation 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, |
3rd Quarter |
Year-to-Date | |||||||||||
|
For the Periods Ended September 30, |
2015 |
2014 |
% |
2015 |
2014 |
% | |||||||
|
Operating Revenues |
|||||||||||||
|
Freight revenues |
$ |
5,215 |
$ |
5,819 |
(10)% |
$ |
15,534 |
$ |
16,766 |
(7)% | |||
|
Other revenues |
347 |
363 |
(4) |
1,071 |
1,069 |
- | |||||||
|
Total operating revenues |
5,562 |
6,182 |
(10) |
16,605 |
17,835 |
(7) | |||||||
|
Operating Expenses |
|||||||||||||
|
Compensation and benefits |
1,267 |
1,287 |
(2) |
3,941 |
3,787 |
4 | |||||||
|
Purchased services and materials |
589 |
650 |
(9) |
1,832 |
1,893 |
(3) | |||||||
|
Fuel |
484 |
882 |
(45) |
1,589 |
2,726 |
(42) | |||||||
|
Depreciation |
507 |
481 |
5 |
1,495 |
1,415 |
6 | |||||||
|
Equipment and other rents |
302 |
310 |
(3) |
925 |
938 |
(1) | |||||||
|
Other |
205 |
242 |
(15) |
689 |
696 |
(1) | |||||||
|
Total operating expenses |
3,354 |
3,852 |
(13) |
10,471 |
11,455 |
(9) | |||||||
|
Operating Income |
2,208 |
2,330 |
(5) |
6,134 |
6,380 |
(4) | |||||||
|
Other income |
30 |
20 |
50 |
198 |
80 |
F | |||||||
|
Interest expense |
(157) |
(144) |
9 |
(458) |
(415) |
10 | |||||||
|
Income before income taxes |
2,081 |
2,206 |
(6) |
5,874 |
6,045 |
(3) | |||||||
|
Income taxes |
(781) |
(836) |
(7) |
(2,219) |
(2,296) |
(3) | |||||||
|
Net Income |
$ |
1,300 |
$ |
1,370 |
(5)% |
$ |
3,655 |
$ |
3,749 |
(3)% | |||
|
Share and Per Share |
|||||||||||||
|
Earnings per share - basic |
$ |
1.51 |
$ |
1.53 |
(1)% |
$ |
4.19 |
$ |
4.16 |
1% | |||
|
Earnings per share - diluted |
$ |
1.50 |
$ |
1.53 |
(2) |
$ |
4.18 |
$ |
4.14 |
1 | |||
|
Weighted average number of shares - basic |
862.9 |
893.2 |
(3) |
871.5 |
900.9 |
(3) | |||||||
|
Weighted average number of shares - diluted |
865.8 |
896.9 |
(3) |
874.6 |
904.8 |
(3) | |||||||
|
Dividends declared per share |
$ |
0.55 |
$ |
0.50 |
10 |
$ |
1.65 |
$ |
1.41 |
17 | |||
|
Operating Ratio |
60.3% |
62.3% |
(2.0) pts |
63.1% |
64.2% |
(1.1) pts | |||||||
|
Effective Tax Rate |
37.5% |
37.9% |
(0.4) pts |
37.8% |
38.0% |
(0.2) pts | |||||||
|
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Freight Revenues Statistics (unaudited) | |||||||||||||
|
3rd Quarter |
Year-to-Date | ||||||||||||
|
For the Periods Ended September 30, |
2015 |
2014 |
% |
2015 |
2014 |
% | |||||||
|
Freight Revenues (Millions) |
|||||||||||||
|
Agricultural Products |
$ |
880 |
$ |
915 |
(4)% |
$ |
2,686 |
$ |
2,759 |
(3)% | |||
|
Automotive |
529 |
527 |
- |
1,605 |
1,560 |
3 | |||||||
|
Chemicals |
882 |
936 |
(6) |
2,684 |
2,742 |
(2) | |||||||
|
Coal |
898 |
1,099 |
(18) |
2,492 |
3,049 |
(18) | |||||||
|
Industrial Products |
979 |
1,161 |
(16) |
2,966 |
3,302 |
(10) | |||||||
|
Intermodal |
1,047 |
1,181 |
(11) |
3,101 |
3,354 |
(8) | |||||||
|
Total |
$ |
5,215 |
$ |
5,819 |
(10)% |
$ |
15,534 |
$ |
16,766 |
(7)% | |||
|
Revenue Carloads (Thousands) |
|||||||||||||
|
Agricultural Products |
232 |
239 |
(3)% |
702 |
721 |
(3)% | |||||||
|
Automotive |
214 |
204 |
5 |
638 |
600 |
6 | |||||||
|
Chemicals |
278 |
288 |
(3) |
828 |
841 |
(2) | |||||||
|
Coal |
398 |
466 |
(15) |
1,106 |
1,313 |
(16) | |||||||
|
Industrial Products |
319 |
363 |
(12) |
933 |
1,033 |
(10) | |||||||
|
Intermodal* |
898 |
936 |
(4) |
2,652 |
2,693 |
(2) | |||||||
|
Total |
2,339 |
2,496 |
(6)% |
6,859 |
7,201 |
(5)% | |||||||
|
Average Revenue per Car |
|||||||||||||
|
Agricultural Products |
$ |
3,793 |
$ |
3,836 |
(1)% |
$ |
3,825 |
$ |
3,828 |
-% | |||
|
Automotive |
2,469 |
2,590 |
(5) |
2,516 |
2,600 |
(3) | |||||||
|
Chemicals |
3,165 |
3,249 |
(3) |
3,239 |
3,261 |
(1) | |||||||
|
Coal |
2,259 |
2,362 |
(4) |
2,254 |
2,323 |
(3) | |||||||
|
Industrial Products |
3,073 |
3,195 |
(4) |
3,179 |
3,195 |
(1) | |||||||
|
Intermodal* |
1,166 |
1,260 |
(7) |
1,169 |
1,245 |
(6) | |||||||
|
Average |
$ |
2,229 |
$ |
2,331 |
(4)% |
$ |
2,265 |
$ |
2,328 |
(3)% | |||
|
* |
Each intermodal container or trailer equals one carload. |
|
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Condensed Consolidated Statements of Financial Position (unaudited) | ||||
|
Sep. 30, |
Dec. 31, | |||
|
Millions, Except Percentages |
2015 |
2014 | ||
|
Assets |
||||
|
Cash and cash equivalents |
$ |
1,078 |
$ |
1,586 |
|
Other current assets |
2,864 |
3,093 | ||
|
Investments |
1,373 |
1,390 | ||
|
Net properties |
48,149 |
46,272 | ||
|
Other assets |
299 |
375 | ||
|
Total assets |
$ |
53,763 |
$ |
52,716 |
|
Liabilities and Common Shareholders' Equity |
||||
|
Debt due within one year |
$ |
521 |
$ |
462 |
|
Other current liabilities |
2,987 |
3,303 | ||
|
Debt due after one year |
12,798 |
11,018 | ||
|
Deferred income taxes |
15,062 |
14,680 | ||
|
Other long-term liabilities |
1,796 |
2,064 | ||
|
Total liabilities |
33,164 |
31,527 | ||
|
Total common shareholders' equity |
20,599 |
21,189 | ||
|
Total liabilities and common shareholders' equity |
$ |
53,763 |
$ |
52,716 |
|
Debt to Capital |
39.3% |
35.1% | ||
|
Adjusted Debt to Capital* |
44.5% |
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 8 for a reconciliation to GAAP. |
|
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Condensed Consolidated Statements of Cash Flows (unaudited) | ||||
|
Millions, |
Year-to-Date | |||
|
For the Periods Ended September 30, |
2015 |
2014 | ||
|
Operating Activities |
||||
|
Net income |
$ |
3,655 |
$ |
3,749 |
|
Depreciation |
1,495 |
1,415 | ||
|
Deferred income taxes |
355 |
289 | ||
|
Other - net |
120 |
(95) | ||
|
Cash provided by operating activities |
5,625 |
5,358 | ||
|
Investing Activities |
||||
|
Capital investments |
(3,323) |
(3,226) | ||
|
Other - net |
73 |
(99) | ||
|
Cash used in investing activities |
(3,250) |
(3,325) | ||
|
Financing Activities |
||||
|
Debt issued |
2,243 |
2,588 | ||
|
Common shares repurchased |
(2,795) |
(2,312) | ||
|
Dividends paid* |
(1,877) |
(1,186) | ||
|
Debt repaid |
(436) |
(678) | ||
|
Other - net |
(18) |
10 | ||
|
Cash used in financing activities |
(2,883) |
(1,578) | ||
|
Net Change in Cash and Cash Equivalents |
(508) |
455 | ||
|
Cash and cash equivalents at beginning of year |
1,586 |
1,432 | ||
|
Cash and Cash Equivalents at End of Period |
$ |
1,078 |
$ |
1,887 |
|
Free Cash Flow** |
||||
|
Cash provided by operating activities |
$ |
5,625 |
$ |
5,358 |
|
Cash used in investing activities |
(3,250) |
(3,325) | ||
|
Dividends paid* |
(1,877) |
(1,186) | ||
|
Free cash flow |
$ |
498 |
$ |
847 |
|
* |
The 2015 dividends paid amount includes the fourth quarter 2014 dividend of $438 million, which was paid on January 2, 2015, the first quarter 2015 dividend of $484 million, which was paid on March 30, 2015, the second quarter 2015 dividend of $479 million, which was paid on June 30, 2015, as well as the third quarter 2015 dividend of $476 million, which was paid on September 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 COMPANIES Operating and Performance Statistics (unaudited) | |||||||||
|
3rd Quarter |
Year-to-Date | ||||||||
|
For the Periods Ended September 30, |
2015 |
2014 |
% |
2015 |
2014 |
% | |||
|
Operating/Performance Statistics |
|||||||||
|
Gross ton-miles (GTMs) (millions) |
238,001 |
259,969 |
(8)% |
702,822 |
752,638 |
(7)% | |||
|
Employees (average) |
47,515 |
47,550 |
- |
48,446 |
46,922 |
3 | |||
|
GTMs (millions) per employee |
5.01 |
5.47 |
(8) |
14.51 |
16.04 |
(10) | |||
|
Locomotive Fuel Statistics |
|||||||||
|
Average fuel price per gallon consumed |
$ 1.81 |
$ 3.01 |
(40)% |
$ 1.92 |
$ 3.08 |
(38)% | |||
|
Fuel consumed in gallons (millions) |
261 |
283 |
(8) |
807 |
860 |
(6) | |||
|
Fuel consumption rate* |
1.097 |
1.091 |
1 |
1.149 |
1.143 |
1 | |||
|
AAR Reported Performance Measures |
|||||||||
|
Average train speed (miles per hour) |
25.6 |
23.8 |
8% |
24.9 |
24.1 |
3% | |||
|
Average terminal dwell time (hours) |
28.7 |
29.7 |
(3) |
29.2 |
30.1 |
(3) | |||
|
Revenue Ton-Miles (Millions) |
|||||||||
|
Agricultural Products |
22,095 |
22,552 |
(2)% |
66,358 |
69,363 |
(4)% | |||
|
Automotive |
4,446 |
4,183 |
6 |
13,489 |
12,481 |
8 | |||
|
Chemicals |
17,697 |
19,159 |
(8) |
54,583 |
56,823 |
(4) | |||
|
Coal |
42,215 |
50,660 |
(17) |
115,157 |
140,916 |
(18) | |||
|
Industrial Products |
19,280 |
22,859 |
(16) |
58,782 |
65,876 |
(11) | |||
|
Intermodal |
19,915 |
21,192 |
(6) |
59,948 |
62,452 |
(4) | |||
|
Total |
125,648 |
140,605 |
(11)% |
368,317 |
407,911 |
(10)% | |||
|
* |
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) | ||||||||
|
2015 | ||||||||
|
Millions, Except Per Share Amounts and Percentages, |
1st Qtr |
2nd Qtr |
3rd Qtr |
Year-to-Date | ||||
|
Operating Revenues |
||||||||
|
Freight revenues |
$ |
5,251 |
$ |
5,068 |
$ |
5,215 |
$ |
15,534 |
|
Other revenues |
363 |
361 |
347 |
1,071 | ||||
|
Total operating revenues |
5,614 |
5,429 |
5,562 |
16,605 | ||||
|
Operating Expenses |
||||||||
|
Compensation and benefits |
1,369 |
1,305 |
1,267 |
3,941 | ||||
|
Purchased services and materials |
643 |
600 |
589 |
1,832 | ||||
|
Fuel |
564 |
541 |
484 |
1,589 | ||||
|
Depreciation |
491 |
497 |
507 |
1,495 | ||||
|
Equipment and other rents |
311 |
312 |
302 |
925 | ||||
|
Other |
259 |
225 |
205 |
689 | ||||
|
Total operating expenses |
3,637 |
3,480 |
3,354 |
10,471 | ||||
|
Operating Income |
1,977 |
1,949 |
2,208 |
6,134 | ||||
|
Other income |
26 |
142 |
30 |
198 | ||||
|
Interest expense |
(148) |
(153) |
(157) |
(458) | ||||
|
Income before income taxes |
1,855 |
1,938 |
2,081 |
5,874 | ||||
|
Income taxes |
(704) |
(734) |
(781) |
(2,219) | ||||
|
Net Income |
$ |
1,151 |
$ |
1,204 |
$ |
1,300 |
$ |
3,655 |
|
Share and Per Share |
||||||||
|
Earnings per share - basic |
$ |
1.31 |
$ |
1.38 |
$ |
1.51 |
$ |
4.19 |
|
Earnings per share - diluted |
$ |
1.30 |
$ |
1.38 |
$ |
1.50 |
$ |
4.18 |
|
Weighted average number of shares - basic |
879.3 |
872.2 |
862.9 |
871.5 | ||||
|
Weighted average number of shares - diluted |
882.8 |
875.2 |
865.8 |
874.6 | ||||
|
Dividends declared per share |
$ |
0.55 |
$ |
0.55 |
$ |
0.55 |
$ |
1.65 |
|
Operating Ratio |
64.8% |
64.1% |
60.3% |
63.1% | ||||
|
Effective Tax Rate |
38.0% |
37.9% |
37.5% |
37.8% | ||||
|
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Freight Revenues Statistics (unaudited) | ||||||||
|
2015 | ||||||||
|
1st Qtr |
2nd Qtr |
3rd Qtr |
Year-to-Date | |||||
|
Freight Revenues (Millions) |
||||||||
|
Agricultural Products |
$ |
939 |
$ |
867 |
$ |
880 |
$ |
2,686 |
|
Automotive |
516 |
560 |
529 |
1,605 | ||||
|
Chemicals |
897 |
905 |
882 |
2,684 | ||||
|
Coal |
915 |
679 |
898 |
2,492 | ||||
|
Industrial Products |
1,017 |
970 |
979 |
2,966 | ||||
|
Intermodal |
967 |
1,087 |
1,047 |
3,101 | ||||
|
Total |
$ |
5,251 |
$ |
5,068 |
$ |
5,215 |
$ |
15,534 |
|
Revenue Carloads (Thousands) |
||||||||
|
Agricultural Products |
245 |
225 |
232 |
702 | ||||
|
Automotive |
202 |
222 |
214 |
638 | ||||
|
Chemicals |
267 |
283 |
278 |
828 | ||||
|
Coal |
399 |
309 |
398 |
1,106 | ||||
|
Industrial Products |
306 |
308 |
319 |
933 | ||||
|
Intermodal* |
812 |
942 |
898 |
2,652 | ||||
|
Total |
2,231 |
2,289 |
2,339 |
6,859 | ||||
|
Average Revenue per Car |
||||||||
|
Agricultural Products |
$ |
3,838 |
$ |
3,844 |
$ |
3,793 |
$ |
3,825 |
|
Automotive |
2,553 |
2,528 |
2,469 |
2,516 | ||||
|
Chemicals |
3,362 |
3,197 |
3,165 |
3,239 | ||||
|
Coal |
2,293 |
2,197 |
2,259 |
2,254 | ||||
|
Industrial Products |
3,325 |
3,144 |
3,073 |
3,179 | ||||
|
Intermodal* |
1,191 |
1,154 |
1,166 |
1,169 | ||||
|
Average |
$ |
2,354 |
$ |
2,213 |
$ |
2,229 |
$ |
2,265 |
|
* |
Each intermodal container or trailer equals one carload. |
|
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES | ||||
|
Non-GAAP Measures Reconciliation to GAAP | ||||
|
Debt to Capital* |
||||
|
Sep. 30, |
Dec. 31, | |||
|
Millions, Except Percentages |
2015 |
2014 | ||
|
Debt (a) |
$ |
13,319 |
$ |
11,480 |
|
Equity |
20,599 |
21,189 | ||
|
Capital (b) |
$ |
33,918 |
$ |
32,669 |
|
Debt to capital (a/b) |
39.3% |
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* |
||||
|
Sep. 30, |
Dec. 31, | |||
|
Millions, Except Percentages |
2015 |
2014 | ||
|
Debt |
$ |
13,319 |
$ |
11,480 |
|
Net present value of operating leases |
2,719 |
2,902 | ||
|
Unfunded pension and OPEB |
455 |
523 | ||
|
Adjusted debt (a) |
16,493 |
14,905 | ||
|
Equity |
20,599 |
21,189 | ||
|
Adjusted capital (b) |
$ |
37,092 |
$ |
36,094 |
|
Adjusted debt to capital (a/b) |
44.5% |
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 September 30, 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. |
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SOURCE Union Pacific Corporation