Union Pacific Reports Third Quarter 2020 Results
OMAHA, Neb., Oct. 22, 2020 /PRNewswire/ -- Union Pacific Corporation (NYSE: UNP) today reported 2020 third quarter net income of $1.4 billion, or $2.01 per diluted share. This compares to $1.6 billion, or $2.22 per diluted share, in the third quarter 2019.
"Our third quarter results represent another step in our company's transformation. We demonstrated our ability to efficiently adjust to a sharp rebound in volume, which increased 19% from the second quarter, while operating expenses, excluding fuel price changes, increased only 11% sequentially," said Lance Fritz, Union Pacific chairman, president and chief executive officer. "The strong financial results and quality service product delivered in the quarter are a testament to the women and men of Union Pacific as they continue to exhibit their commitment and resilience through safe operations."
Third Quarter Summary
Operating revenue of $4.9 billion was down 11% in third quarter 2020, compared to third quarter 2019. Third quarter business volumes, as measured by total revenue carloads, decreased 4% compared to 2019. Premium volumes increased compared to 2019, while industrial and bulk declined. In addition:
- Quarterly freight revenue declined 11%, compared to third quarter 2019, as core pricing gains were more than offset by lower volumes, a less favorable business mix, and decreased fuel surcharge revenue.
- Union Pacific's 58.7% operating ratio, an all-time quarterly record, improved 0.8 points compared to the third quarter 2019. Lower fuel prices positively impacted the operating ratio by 100 basis points.
- The $1.36 per gallon average quarterly diesel fuel price in third quarter 2020 was 35% lower than third quarter 2019.
- Union Pacific's reportable personal injury rate was 0.90 per 200,000 employee-hours for the first three quarters 2020, compared to 0.82 for the same period 2019.
- Quarterly freight car velocity was 220 daily miles per car, a 3% improvement compared to third quarter 2019.
- Quarterly locomotive productivity was 138 gross ton-miles per horsepower day, an all-time quarterly record and an 11% improvement compared to third quarter 2019.
- Quarterly workforce productivity was 998 car miles per employee, an all-time quarterly record and a 13% improvement compared to third quarter 2019.
- Average maximum train length was 8,984 feet, a 13% increase compared to third quarter 2019.
Summary of Third Quarter Freight Revenues
- Bulk down 12%
- Industrial down 18%
- Premium down 1%
2020 Outlook
"The results we are delivering, both operationally and financially, deepen our conviction that the changes we're making to transform our railroad are on target and on track," said Fritz. "An improved customer experience, coupled with a lower cost structure, is opening up new markets and opportunities to grow our business as we win with customers and convert more freight to rail."
Third Quarter 2020 Earnings Conference Call
Union Pacific will webcast its third quarter 2020 earnings release presentation live at www.up.com/investor and via teleconference on Thursday, October 22, 2020 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.
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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, its results of operations, and potential impacts of the COVID-19 pandemic. 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 2019, which was filed with the SEC on February 7, 2020 and the Company's Quarterly Report on Form 10-Q which was filed with the SEC on July 23, 2020. 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 COMPANIESCondensed Consolidated Statements of Income (unaudited) | |||||||||||||
Millions, Except Per Share Amounts and Percentages, | 3rd Quarter | Year-to-Date | |||||||||||
For the Periods Ended September 30, | 2020 | 2019 | % | 2020 | 2019 | % | |||||||
Operating Revenues | |||||||||||||
Freight revenues | $ | 4,596 | $ | 5,146 | (11) | % | $ | 13,448 | $ | 15,392 | (13) | % | |
Other | 323 | 370 | (13) | 944 | 1,104 | (14) | |||||||
Total operating revenues | 4,919 | 5,516 | (11) | 14,392 | 16,496 | (13) | |||||||
Operating Expenses | |||||||||||||
Compensation and benefits | 1,008 | 1,134 | (11) | 2,972 | 3,484 | (15) | |||||||
Depreciation | 555 | 557 | - | 1,653 | 1,657 | - | |||||||
Purchased services and materials | 508 | 574 | (11) | 1,470 | 1,723 | (15) | |||||||
Fuel | 301 | 504 | (40) | 982 | 1,595 | (38) | |||||||
Equipment and other rents | 217 | 236 | (8) | 655 | 754 | (13) | |||||||
Other | 299 | 277 | 8 | 832 | 829 | - | |||||||
Total operating expenses | 2,888 | 3,282 | (12) | 8,564 | 10,042 | (15) | |||||||
Operating Income | 2,031 | 2,234 | (9) | 5,828 | 6,454 | (10) | |||||||
Other income | 37 | 53 | (30) | 221 | 187 | 18 | |||||||
Interest expense | (295) | (266) | 11 | (862) | (772) | 12 | |||||||
Income before income taxes | 1,773 | 2,021 | (12) | 5,187 | 5,869 | (12) | |||||||
Income taxes | (410) | (466) | (12) | (1,218) | (1,353) | (10) | |||||||
Net Income | $ | 1,363 | $ | 1,555 | (12) | % | $ | 3,969 | $ | 4,516 | (12) | % | |
Share and Per Share | |||||||||||||
Earnings per share - basic | $ | 2.02 | $ | 2.22 | (9) | % | $ | 5.85 | $ | 6.39 | (8) | % | |
Earnings per share - diluted | $ | 2.01 | $ | 2.22 | (9) | $ | 5.83 | $ | 6.36 | (8) | |||
Weighted average number of shares - basic | 675.0 | 699.3 | (3) | 679.0 | 707.2 | (4) | |||||||
Weighted average number of shares - diluted | 676.8 | 701.9 | (4) | 680.7 | 709.8 | (4) | |||||||
Dividends declared per share | $ | 0.97 | $ | 0.97 | - | $ | 2.91 | $ | 2.73 | 7 | |||
Operating Ratio | 58.7% | 59.5% | (0.8) | pts | 59.5% | 60.9% | (1.4) | pts | |||||
Effective Tax Rate | 23.1% | 23.1% | - | pts | 23.5% | 23.1% | 0.4 | pts | |||||
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIESFreight Revenues Statistics (unaudited) | |||||||||||||
3rd Quarter | Year-to-Date | ||||||||||||
For the Periods Ended September 30, | 2020 | 2019 | % | 2020 | 2019 | % | |||||||
Freight Revenues (Millions) | |||||||||||||
Grain & grain products | $ | 695 | $ | 704 | (1) | % | $ | 2,028 | $ | 2,080 | (3) | % | |
Fertilizer | 157 | 161 | (2) | 499 | 492 | 1 | |||||||
Food & refrigerated | 239 | 253 | (6) | 694 | 767 | (10) | |||||||
Coal & renewables | 387 | 564 | (31) | 1,177 | 1,641 | (28) | |||||||
Bulk | 1,478 | 1,682 | (12) | 4,398 | 4,980 | (12) | |||||||
Industrial chemicals & plastics | 454 | 494 | (8) | 1,384 | 1,428 | (3) | |||||||
Metals & minerals | 365 | 520 | (30) | 1,202 | 1,613 | (25) | |||||||
Forest products | 284 | 290 | (2) | 853 | 878 | (3) | |||||||
Energy & specialized markets | 464 | 598 | (22) | 1,522 | 1,759 | (13) | |||||||
Industrial | 1,567 | 1,902 | (18) | 4,961 | 5,678 | (13) | |||||||
Automotive | 481 | 542 | (11) | 1,194 | 1,616 | (26) | |||||||
Intermodal | 1,070 | 1,020 | 5 | 2,895 | 3,118 | (7) | |||||||
Premium | 1,551 | 1,562 | (1) | 4,089 | 4,734 | (14) | |||||||
Total | $ | 4,596 | $ | 5,146 | (11) | % | $ | 13,448 | - | 15,392 | (13) | % | |
Revenue Carloads (Thousands) | |||||||||||||
Grain & grain products | 187 | 181 | 3 | % | 529 | 528 | - | % | |||||
Fertilizer | 50 | 48 | 4 | 149 | 145 | 3 | |||||||
Food & refrigerated | 48 | 48 | - | 137 | 147 | (7) | |||||||
Coal & renewables | 213 | 271 | (21) | 607 | 771 | (21) | |||||||
Bulk | 498 | 548 | (9) | 1,422 | 1,591 | (11) | |||||||
Industrial chemicals & plastics | 144 | 158 | (9) | 439 | 463 | (5) | |||||||
Metals & minerals | 156 | 200 | (22) | 492 | 579 | (15) | |||||||
Forest products | 55 | 55 | - | 161 | 167 | (4) | |||||||
Energy & specialized markets | 125 | 157 | (20) | 402 | 460 | (13) | |||||||
Industrial | 480 | 570 | (16) | 1,494 | 1,669 | (10) | |||||||
Automotive | 203 | 222 | (9) | 490 | 650 | (25) | |||||||
Intermodal [a] | 863 | 789 | 9 | 2,296 | 2,443 | (6) | |||||||
Premium | 1,066 | 1,011 | 5 | 2,786 | 3,093 | (10) | |||||||
Total | 2,044 | 2,129 | (4) | % | 5,702 | 6,353 | (10) | % | |||||
Average Revenue per Car | |||||||||||||
Grain & grain products | $ | 3,705 | $ | 3,900 | (5) | % | $ | 3,832 | $ | 3,939 | (3) | % | |
Fertilizer | 3,172 | 3,334 | (5) | 3,361 | 3,391 | (1) | |||||||
Food & refrigerated | 4,891 | 5,203 | (6) | 5,053 | 5,211 | (3) | |||||||
Coal & renewables | 1,820 | 2,082 | (13) | 1,938 | 2,129 | (9) | |||||||
Bulk | 2,964 | 3,068 | (3) | 3,092 | 3,130 | (1) | |||||||
Industrial chemicals & plastics | 3,154 | 3,131 | 1 | 3,150 | 3,087 | 2 | |||||||
Metals & minerals | 2,337 | 2,599 | (10) | 2,444 | 2,785 | (12) | |||||||
Forest products | 5,181 | 5,275 | (2) | 5,300 | 5,249 | 1 | |||||||
Energy & specialized markets | 3,742 | 3,797 | (1) | 3,791 | 3,822 | (1) | |||||||
Industrial | 3,271 | 3,336 | (2) | 3,321 | 3,402 | (2) | |||||||
Automotive | 2,368 | 2,436 | (3) | 2,438 | 2,485 | (2) | |||||||
Intermodal [a] | 1,238 | 1,294 | (4) | 1,261 | 1,276 | (1) | |||||||
Premium | 1,454 | 1,545 | (6) | 1,468 | 1,530 | (4) | |||||||
Average | $ | 2,248 | $ | 2,417 | (7) | % | $ | 2,359 | $ | 2,423 | (3) | % | |
[a] For intermodal shipments each container or trailer equals one carload. | |||||||||||||
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIESCondensed Consolidated Statements of Financial Position (unaudited) | ||||
Sep. 30, | Dec. 31, | |||
Millions, Except Percentages | 2020 | 2019 | ||
Assets | ||||
Cash and cash equivalents | $ | 2,601 | $ | 831 |
Short-term investments | 60 | 60 | ||
Other current assets | 2,469 | 2,568 | ||
Investments | 2,071 | 2,050 | ||
Net properties | 54,375 | 53,916 | ||
Operating lease assets | 1,642 | 1,812 | ||
Other assets | 496 | 436 | ||
Total assets | $ | 63,714 | $ | 61,673 |
Liabilities and Common Shareholders' Equity | ||||
Debt due within one year | $ | 1,980 | $ | 1,257 |
Other current liabilities | 2,861 | 3,094 | ||
Debt due after one year | 26,080 | 23,943 | ||
Operating lease liabilities | 1,293 | 1,471 | ||
Deferred income taxes | 12,328 | 11,992 | ||
Other long-term liabilities | 1,973 | 1,788 | ||
Total liabilities | 46,515 | 43,545 | ||
Total common shareholders' equity | 17,199 | 18,128 | ||
Total liabilities and common shareholders' equity | $ | 63,714 | $ | 61,673 |
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIESCondensed Consolidated Statements of Cash Flows (unaudited) | ||||
Millions, | Year-to-Date | |||
For the Periods Ended September 30, | 2020 | 2019 | ||
Operating Activities | ||||
Net income | $ | 3,969 | $ | 4,516 |
Depreciation | 1,653 | 1,657 | ||
Deferred income taxes | 327 | 297 | ||
Other - net | 44 | (206) | ||
Cash provided by operating activities | 5,993 | 6,264 | ||
Investing Activities | ||||
Capital investments | (2,294) | (2,495) | ||
Maturities of short-term investments | 106 | 120 | ||
Purchases of short-term investments | (106) | (110) | ||
Other - net | 213 | (22) | ||
Cash used in investing activities | (2,081) | (2,507) | ||
Financing Activities | ||||
Debt issued | 4,004 | 3,986 | ||
Share repurchase programs | (2,956) | (5,162) | ||
Dividends paid | (1,974) | (1,925) | ||
Debt repaid | (832) | (642) | ||
Debt Exchange | (327) | - | ||
Net issuance of commercial paper | (2) | (5) | ||
Other - net | (63) | (34) | ||
Cash used in financing activities | (2,150) | (3,782) | ||
Net Change in Cash, Cash Equivalents and Restricted Cash | 1,762 | (25) | ||
Cash, cash equivalents, and restricted cash at beginning of year | 856 | 1,328 | ||
Cash, Cash Equivalents, and Restricted Cash at End of Period | $ | 2,618 | $ | 1,303 |
Free Cash Flow* | ||||
Cash provided by operating activities | $ | 5,993 | $ | 6,264 |
Cash used in investing activities | (2,081) | (2,507) | ||
Dividends paid | (1,974) | (1,925) | ||
Free cash flow | $ | 1,938 | $ | 1,832 |
* | 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 COMPANIESOperating and Performance Statistics (unaudited) | |||||||||||
3rd Quarter | Year-to-Date | ||||||||||
For the Periods Ended September 30, | 2020 | 2019 | % | 2020 | 2019 | % | |||||
Operating/Performance Statistics | |||||||||||
Freight car velocity (daily miles per car) [a] | 220 | 214 | 3 | % | 217 | 203 | 7 | % | |||
Average train speed (miles per hour) [a] * | 25.3 | 25.2 | - | 25.8 | 24.8 | 4 | |||||
Average terminal dwell time (hours) [a] * | 22.8 | 23.6 | (3) | 22.8 | 25.3 | (10) | |||||
Locomotive productivity (GTMs per horsepower day) | 138 | 124 | 11 | 135 | 118 | 14 | |||||
Gross ton-miles (GTMs) (millions) | 196,998 | 215,487 | (9) | 568,921 | 645,815 | (12) | |||||
Train length (feet) | 8,984 | 7,924 | 13 | 8,676 | 7,618 | 14 | |||||
Intermodal car trip plan compliance (%) | 77 | 81 | (4) | pts | 81 | 72 | 9 | pts | |||
Manifest/Automotive car trip plan compliance (%) | 72 | 67 | 5 | pts | 70 | 63 | 7 | pts | |||
Workforce productivity (car miles per employee) | 998 | 883 | 13 | 920 | 853 | 8 | |||||
Total employees (average) | 30,155 | 36,659 | (18) | 31,362 | 38,456 | (18) | |||||
Locomotive Fuel Statistics | |||||||||||
Average fuel price per gallon consumed | $1.36 | $ 2.09 | (35) | % | $ 1.51 | $ 2.13 | (29) | % | |||
Fuel consumed in gallons (millions) | 213 | 232 | (8) | 627 | 725 | (14) | |||||
Fuel consumption rate** | 1.084 | 1.075 | 1 | 1.103 | 1.122 | (2) | |||||
Revenue Ton-Miles (Millions) | |||||||||||
Grain & grain products | 18,035 | 16,545 | 9 | % | 50,388 | 49,966 | 1 | % | |||
Fertilizer | 2,932 | 2,737 | 7 | 9,092 | 8,722 | 4 | |||||
Food & refrigerated | 4,614 | 4,679 | (1) | 12,872 | 14,037 | (8) | |||||
Coal & renewables | 20,374 | 27,516 | (26) | 58,567 | 78,700 | (26) | |||||
Bulk | 45,955 | 51,477 | (11) | 130,919 | 151,425 | (14) | |||||
Industrial chemicals & plastics | 7,170 | 7,268 | (1) | 20,630 | 21,295 | (3) | |||||
Metals & minerals | 6,536 | 9,224 | (29) | 21,471 | 29,403 | (27) | |||||
Forest products | 5,882 | 5,784 | 2 | 17,321 | 17,711 | (2) | |||||
Energy & specialized markets | 8,005 | 11,381 | (30) | 27,327 | 33,173 | (18) | |||||
Industrial | 27,593 | 33,657 | (18) | 86,749 | 101,582 | (15) | |||||
Automotive | 4,269 | 4,757 | (10) | 10,498 | 13,954 | (25) | |||||
Intermodal | 20,096 | 18,216 | 10 | 55,344 | 56,540 | (2) | |||||
Premium | 24,365 | 22,973 | 6 | 65,842 | 70,494 | (7) | |||||
Total | 97,913 | 108,107 | (9) | % | 283,510 | 323,501 | (12) | % | |||
[a] | Prior years have been realigned to conform to the current year presentation. |
* | 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 COMPANIESCondensed Consolidated Statements of Income (unaudited) | ||||||||
2020 | ||||||||
Millions, Except Per Share Amounts and Percentages, | 1st Qtr | 2nd Qtr | 3rd Qtr | Year-to-Date | ||||
Operating Revenues | ||||||||
Freight revenues | $ | 4,880 | $ | 3,972 | $ | 4,596 | $ | 13,448 |
Other revenues | 349 | 272 | 323 | 944 | ||||
Total operating revenues | 5,229 | 4,244 | 4,919 | 14,392 | ||||
Operating Expenses | ||||||||
Compensation and benefits | 1,059 | 905 | 1,008 | 2,972 | ||||
Depreciation | 547 | 551 | 555 | 1,653 | ||||
Purchased services and materials | 521 | 441 | 508 | 1,470 | ||||
Fuel | 434 | 247 | 301 | 982 | ||||
Equipment and other rents | 227 | 211 | 217 | 655 | ||||
Other | 298 | 235 | 299 | 832 | ||||
Total operating expenses | 3,086 | 2,590 | 2,888 | 8,564 | ||||
Operating Income | 2,143 | 1,654 | 2,031 | 5,828 | ||||
Other income | 53 | 131 | 37 | 221 | ||||
Interest expense | (278) | (289) | (295) | (862) | ||||
Income before income taxes | 1,918 | 1,496 | 1,773 | 5,187 | ||||
Income taxes | (444) | (364) | (410) | (1,218) | ||||
Net Income | $ | 1,474 | $ | 1,132 | $ | 1,363 | $ | 3,969 |
Share and Per Share | ||||||||
Earnings per share - basic | $ | 2.15 | $ | 1.67 | $ | 2.02 | $ | 5.85 |
Earnings per share - diluted | $ | 2.15 | $ | 1.67 | $ | 2.01 | $ | 5.83 |
Weighted average number of shares - basic | 684.3 | 677.7 | 675.0 | 679.0 | ||||
Weighted average number of shares - diluted | 686.2 | 679.2 | 676.8 | 680.7 | ||||
Dividends declared per share | $ | 0.97 | $ | 0.97 | $ | 0.97 | $ | 2.91 |
Operating Ratio | 59.0% | 61.0% | 58.7% | 59.5% | ||||
Effective Tax Rate | 23.1% | 24.3% | 23.1% | 23.5% | ||||
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIESFreight Revenues Statistics (unaudited) | ||||||||
2020 | ||||||||
1st Qtr | 2nd Qtr | 3rd Qtr | Year-to-Date | |||||
Freight Revenues (Millions) | ||||||||
Grain & grain products | $ | 689 | $ | 644 | $ | 695 | $ | 2,028 |
Fertilizer | 174 | 168 | 157 | 499 | ||||
Food & refrigerated | 250 | 205 | 239 | 694 | ||||
Coal & renewables | 421 | 369 | 387 | 1,177 | ||||
Bulk | 1,534 | 1,386 | 1,478 | 4,398 | ||||
Industrial chemicals & plastics | 495 | 435 | 454 | 1,384 | ||||
Metals & minerals | 469 | 368 | 365 | 1,202 | ||||
Forest products | 303 | 266 | 284 | 853 | ||||
Energy & specialized markets | 627 | 431 | 464 | 1,522 | ||||
Industrial | 1,894 | 1,500 | 1,567 | 4,961 | ||||
Automotive | 524 | 189 | 481 | 1,194 | ||||
Intermodal | 928 | 897 | 1,070 | 2,895 | ||||
Premium | 1,452 | 1,086 | 1,551 | 4,089 | ||||
Total | $ | 4,880 | $ | 3,972 | $ | 4,596 | $ | 13,448 |
Revenue Carloads (Thousands) | ||||||||
Grain & grain products | 175 | 167 | 187 | 529 | ||||
Fertilizer | 46 | 53 | 50 | 149 | ||||
Food & refrigerated | 48 | 41 | 48 | 137 | ||||
Coal & renewables | 208 | 186 | 213 | 607 | ||||
Bulk | 477 | 447 | 498 | 1,422 | ||||
Industrial chemicals & plastics | 154 | 141 | 144 | 439 | ||||
Metals & minerals | 174 | 162 | 156 | 492 | ||||
Forest products | 56 | 50 | 55 | 161 | ||||
Energy & specialized markets | 162 | 115 | 125 | 402 | ||||
Industrial | 546 | 468 | 480 | 1,494 | ||||
Automotive | 208 | 79 | 203 | 490 | ||||
Intermodal [a] | 709 | 724 | 863 | 2,296 | ||||
Premium | 917 | 803 | 1,066 | 2,786 | ||||
Total | 1,940 | 1,718 | 2,044 | 5,702 | ||||
Average Revenue per Car | ||||||||
Grain & grain products | $ | 3,940 | $ | 3,861 | $ | 3,705 | $ | 3,832 |
Fertilizer | 3,768 | 3,181 | 3,172 | 3,361 | ||||
Food & refrigerated | 5,277 | 4,986 | 4,891 | 5,053 | ||||
Coal & renewables | 2,022 | 1,979 | 1,820 | 1,938 | ||||
Bulk | 3,219 | 3,099 | 2,964 | 3,092 | ||||
Industrial chemicals & plastics | 3,205 | 3,086 | 3,154 | 3,150 | ||||
Metals & minerals | 2,697 | 2,276 | 2,337 | 2,444 | ||||
Forest products | 5,457 | 5,256 | 5,181 | 5,300 | ||||
Energy & specialized markets | 3,866 | 3,739 | 3,742 | 3,791 | ||||
Industrial | 3,469 | 3,201 | 3,271 | 3,321 | ||||
Automotive | 2,525 | 2,388 | 2,368 | 2,438 | ||||
Intermodal [a] | 1,307 | 1,241 | 1,238 | 1,261 | ||||
Premium | 1,583 | 1,354 | 1,454 | 1,468 | ||||
Average | $ | 2,516 | $ | 2,312 | $ | 2,248 | $ | 2,359 |
[a] For intermodal shipments each container or trailer equals one carload. | ||||||||
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIESNon-GAAP Measures Reconciliation to GAAP | ||||
Adjusted Debt / Adjusted EBITDA* | ||||
Millions, Except Ratios | Sep. 30, | Dec. 31, | ||
for the Trailing Twelve Months Ended [a] | 2020 | 2019 | ||
Net income | $ | 5,372 | $ | 5,919 |
Add: | ||||
Income tax expense | 1,693 | 1,828 | ||
Depreciation | 2,212 | 2,216 | ||
Interest expense | 1,140 | 1,050 | ||
EBITDA | $ | 10,417 | $ | 11,013 |
Adjustments: | ||||
Other income | (277) | (243) | ||
Interest on operating lease liabilities** | 59 | 68 | ||
Adjusted EBITDA | $ | 10,199 | $ | 10,838 |
Debt | $ | 28,060 | $ | 25,200 |
Operating lease liabilities | 1,601 | 1,833 | ||
Unfunded pension and OPEB, net of taxes of $107 and $124 | 349 | 400 | ||
Adjusted debt | $ | 30,010 | $ | 27,433 |
Adjusted debt / Adjusted EBITDA | 2.9 | 2.5 | ||
[a] | The trailing twelve months income statement information ended September 30, 2020 is recalculated by taking the twelve months ended December 31, 2019, subtracting the nine months ended September 30, 2019, and adding the nine months ended September 30, 2020. |
* | Total debt plus operating lease liabilities plus after-tax unfunded pension and OPEB obligation 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, 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 reconciliations from net income to adjusted debt to adjusted EBITDA. At both September 30, 2020 and December 31, 2019, the incremental borrowing rate on operating lease liabilities was 3.7%. |
** | 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