Union Pacific Reports Fourth Quarter and Full Year 2021 Results
OMAHA, Neb., Jan. 20, 2022 /PRNewswire/ -- Union Pacific Corporation (NYSE: UNP) today reported 2021 fourth quarter net income of $1.7 billion, or $2.66 per diluted share. This compares to adjusted 2020 fourth quarter net income of $1.6 billion, or $2.36 per diluted share. The 2020 adjusted results exclude a $278 million pre-tax, non-cash impairment charge.
Reported net income for the full year 2021 was $6.5 billion, or $9.95 per diluted share. These full year results compare to adjusted full year 2020 net income of $5.6 billion, or $8.19 per diluted share, which excludes the impairment charge.
"The Union Pacific team concluded its most profitable year ever in 2021. We produced double digit fourth quarter revenue growth by leveraging our great rail franchise to generate positive business mix and core pricing gains, despite ongoing global supply chain challenges that impacted volumes," said Lance Fritz, Union Pacific chairman, president and chief executive officer. "For the third consecutive year we improved our fuel consumption rate, taking steps to reduce our carbon footprint and meet the goals of our 2021 Climate Action Plan. While our safety and operational performance in 2021 did not meet expectations, we look to convert recent progress into sustained improvement in 2022. Although uncertainty remains around COVID variants and supply chain disruptions, we see a positive demand environment in 2022 and continued traction from business development efforts driving growth as we deliver value to all our stakeholders."
Fourth Quarter Summary
Financial Results: Strong Revenue Growth Drives Fourth Quarter Records for Operating Income, Net Income, and Earnings Per ShareFourth Quarter 2021 Compared to Adjusted Fourth Quarter 2020*
- Operating revenue of $5.7 billion was up 12% driven by higher fuel surcharge revenue, a positive business mix, and core pricing gains, partially offset by lower volumes.
- Business volumes, as measured by total revenue carloads, were down 4%.
- Union Pacific's 57.4% operating ratio deteriorated 180 basis points. Higher fuel prices negatively impacted the operating ratio 100 basis points.
- Operating Income of $2.4 billion was up 7%.
- The company repurchased 5.8 million shares in fourth quarter 2021 at an aggregate cost of $1.4 billion.
* 2020 results exclude the Brazos non-cash impairment charge. Please reference page 10 of the supplemental financial information for the reconciliation to GAAP.
Operating Performance: Network Recovery Efforts Slowed by COVID Impacts to Crew Availability Fourth Quarter 2021 Compared to Fourth Quarter 2020
- Quarterly freight car velocity of 197 daily miles per car, a 12% decline.
- Quarterly locomotive productivity was 129 gross ton-miles (GTMs) per horsepower day, a 9% decline.
- Average maximum train length was 9,319 feet, a 2% increase.
- Quarterly workforce productivity was 1,046 car miles per employee, a 1% improvement
- Fuel consumption rate, measured in gallons of fuel per thousand GTMs, was flat.
2021 Full Year Summary
Financial Results: Revenue Growth and Margin Improvement Drives Records for Operating Income, Operating Ratio, Net Income, and Earnings Per ShareFull Year 2021 Compared to Adjusted Full Year 2020*
- Operating revenue of $21.8 billion was up 12% driven by volume growth, higher fuel surcharge revenue, core pricing gains, and a positive business mix.
- Business volumes, as measured by total revenue carloads, were up 4%.
- Union Pacific's 57.2% operating ratio improved 130 basis points. Higher fuel prices negatively impacted the operating ratio by 140 basis points.
- Operating Income of $9.3 billion was up 15%.
- Union Pacific's capital program in 2021 totaled $3.0 billion.
- The company repurchased 33.3 million shares in 2021 at an aggregate cost of $7.3 billion.
* 2020 results exclude the Brazos non-cash impairment charge. Please reference page 10 of the supplemental financial information for the reconciliation to GAAP.
Operating Performance: Network Operations Challenged by Weather Events, Wildfires, COVID Impacted Crew Availability, and Supply Chain Disruptions Full Year 2021 Compared to Full Year 2020
- Union Pacific's reportable personal injury rate deteriorated to 0.98 per 200,000 employee-hours compared to 0.90 for full year 2020.
- Freight car velocity of 203 daily miles per car, an 8% decline.
- Locomotive productivity was 133 GTMs per horsepower day, a 3% decline.
- Average maximum train length was 9,334 feet, a 6% increase.
- Workforce productivity was 1,038 car miles per employee, a 10% improvement.
- Fuel consumption rate, measured in gallons of fuel per thousand GTMs, improved 1%.
Fourth Quarter 2021 Earnings Conference Call
Union Pacific will webcast its fourth quarter 2021 earnings release presentation live at www.up.com/investor and via teleconference on Thursday, January 20, 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, 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 2020, which was filed with the SEC on February 5, 2021. 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, | 4th Quarter | Full Year | ||||||||||||||||||||||
For the Periods Ended December 31, | 2021 | 2020 | % | 2021 | 2020 | % | ||||||||||||||||||
Operating Revenues | ||||||||||||||||||||||||
Freight revenues | $ | 5,297 | $ | 4,803 | 10 | % | $ | 20,244 | $ | 18,251 | 11 | % | ||||||||||||
Other | 436 | 338 | 29 | 1,560 | 1,282 | 22 | ||||||||||||||||||
Total operating revenues | 5,733 | 5,141 | 12 | 21,804 | 19,533 | 12 | ||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||
Compensation and benefits | 1,070 | 1,021 | 5 | 4,158 | 3,993 | 4 | ||||||||||||||||||
Depreciation | 556 | 557 | - | 2,208 | 2,210 | - | ||||||||||||||||||
Fuel | 597 | 332 | 80 | 2,049 | 1,314 | 56 | ||||||||||||||||||
Purchased services and materials | 538 | 492 | 9 | 2,016 | 1,962 | 3 | ||||||||||||||||||
Equipment and other rents | 230 | 220 | 5 | 859 | 875 | (2) | ||||||||||||||||||
Other | 302 | 513 | (41) | 1,176 | 1,345 | (13) | ||||||||||||||||||
Total operating expenses | 3,293 | 3,135 | 5 | 12,466 | 11,699 | 7 | ||||||||||||||||||
Operating Income | 2,440 | 2,006 | 22 | 9,338 | 7,834 | 19 | ||||||||||||||||||
Other income | 83 | 66 | 26 | 297 | 287 | 3 | ||||||||||||||||||
Interest expense | (295) | (279) | 6 | (1,157) | (1,141) | 1 | ||||||||||||||||||
Income before income taxes | 2,228 | 1,793 | 24 | 8,478 | 6,980 | 21 | ||||||||||||||||||
Income taxes | (517) | (413) | 25 | (1,955) | (1,631) | 20 | ||||||||||||||||||
Net Income | $ | 1,711 | $ | 1,380 | 24 | $ | 6,523 | $ | 5,349 | 22 | ||||||||||||||
Share and Per Share | ||||||||||||||||||||||||
Earnings per share - basic | $ | 2.67 | $ | 2.05 | 30 | % | $ | 9.98 | $ | 7.90 | 26 | % | ||||||||||||
Earnings per share - diluted | $ | 2.66 | $ | 2.05 | 30 | $ | 9.95 | $ | 7.88 | 26 | ||||||||||||||
Weighted average number of shares - basic | 640.4 | 672.2 | (5) | 653.8 | 677.3 | (3) | ||||||||||||||||||
Weighted average number of shares - diluted | 642.1 | 674.1 | (5) | 655.4 | 679.1 | (3) | ||||||||||||||||||
Dividends declared per share | $ | 1.18 | $ | 0.97 | 22 | $ | 4.29 | $ | 3.88 | 11 | ||||||||||||||
Operating Ratio | 57.4 | % | 61.0 | % | (3.6) | pts | 57.2 | % | 59.9 | % | (2.7) | pts | ||||||||||||
Effective Tax Rate | 23.2 | % | 23.0 | % | 0.2 | 23.1 | % | 23.4 | % | (0.3) | ||||||||||||||
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Freight Revenues Statistics (unaudited) | ||||||||||||||||||||||||
4th Quarter | Full Year | |||||||||||||||||||||||
For the Periods Ended December 31, | 2021 | 2020 | % | 2021 | 2020 | % | ||||||||||||||||||
Freight Revenues (Millions) | ||||||||||||||||||||||||
Grain & grain products | $ | 889 | $ | 801 | 11 | % | $ | 3,181 | $ | 2,829 | 12 | % | ||||||||||||
Fertilizer | 176 | 161 | 9 | 697 | 660 | 6 | ||||||||||||||||||
Food & refrigerated | 259 | 243 | 7 | 998 | 937 | 7 | ||||||||||||||||||
Coal & renewables | 485 | 357 | 36 | 1,780 | 1,534 | 16 | ||||||||||||||||||
Bulk | 1,809 | 1,562 | 16 | 6,656 | 5,960 | 12 | ||||||||||||||||||
Industrial chemicals & plastics | 507 | 461 | 10 | 1,943 | 1,845 | 5 | ||||||||||||||||||
Metals & minerals | 481 | 378 | 27 | 1,811 | 1,580 | 15 | ||||||||||||||||||
Forest products | 351 | 307 | 14 | 1,357 | 1,160 | 17 | ||||||||||||||||||
Energy & specialized markets | 558 | 515 | 8 | 2,212 | 2,037 | 9 | ||||||||||||||||||
Industrial | 1,897 | 1,661 | 14 | 7,323 | 6,622 | 11 | ||||||||||||||||||
Automotive | 469 | 486 | (3) | 1,761 | 1,680 | 5 | ||||||||||||||||||
Intermodal | 1,122 | 1,094 | 3 | 4,504 | 3,989 | 13 | ||||||||||||||||||
Premium | 1,591 | 1,580 | 1 | 6,265 | 5,669 | 11 | ||||||||||||||||||
Total | $ | 5,297 | $ | 4,803 | 10 | % | $ | 20,244 | $ | 18,251 | 11 | % | ||||||||||||
Revenue Carloads (Thousands) | ||||||||||||||||||||||||
Grain & grain products | 213 | 216 | (1) | % | 805 | 745 | 8 | % | ||||||||||||||||
Fertilizer | 48 | 44 | 9 | 201 | 193 | 4 | ||||||||||||||||||
Food & refrigerated | 48 | 48 | - | 189 | 185 | 2 | ||||||||||||||||||
Coal & renewables | 215 | 190 | 13 | 819 | 797 | 3 | ||||||||||||||||||
Bulk | 524 | 498 | 5 | 2,014 | 1,920 | 5 | ||||||||||||||||||
Industrial chemicals & plastics | 157 | 148 | 6 | 606 | 587 | 3 | ||||||||||||||||||
Metals & minerals | 181 | 154 | 18 | 697 | 646 | 8 | ||||||||||||||||||
Forest products | 63 | 59 | 7 | 250 | 220 | 14 | ||||||||||||||||||
Energy & specialized markets | 137 | 137 | - | 559 | 539 | 4 | ||||||||||||||||||
Industrial | 538 | 498 | 8 | 2,112 | 1,992 | 6 | ||||||||||||||||||
Automotive | 182 | 202 | (10) | 701 | 692 | 1 | ||||||||||||||||||
Intermodal [a] | 728 | 853 | (15) | 3,211 | 3,149 | 2 | ||||||||||||||||||
Premium | 910 | 1,055 | (14) | 3,912 | 3,841 | 2 | ||||||||||||||||||
Total | 1,972 | 2,051 | (4) | % | 8,038 | 7,753 | 4 | % | ||||||||||||||||
Average Revenue per Car | ||||||||||||||||||||||||
Grain & grain products | $ | 4,187 | $ | 3,710 | 13 | % | $ | 3,953 | $ | 3,797 | 4 | % | ||||||||||||
Fertilizer | 3,705 | 3,647 | 2 | 3,470 | 3,427 | 1 | ||||||||||||||||||
Food & refrigerated | 5,409 | 5,030 | 8 | 5,279 | 5,047 | 5 | ||||||||||||||||||
Coal & renewables | 2,251 | 1,887 | 19 | 2,173 | 1,926 | 13 | ||||||||||||||||||
Bulk | 3,457 | 3,139 | 10 | 3,305 | 3,104 | 6 | ||||||||||||||||||
Industrial chemicals & plastics | 3,242 | 3,125 | 4 | 3,207 | 3,144 | 2 | ||||||||||||||||||
Metals & minerals | 2,659 | 2,448 | 9 | 2,598 | 2,445 | 6 | ||||||||||||||||||
Forest products | 5,521 | 5,184 | 7 | 5,424 | 5,269 | 3 | ||||||||||||||||||
Energy & specialized markets | 4,054 | 3,747 | 8 | 3,956 | 3,780 | 5 | ||||||||||||||||||
Industrial | 3,522 | 3,331 | 6 | 3,467 | 3,324 | 4 | ||||||||||||||||||
Automotive | 2,576 | 2,399 | 7 | 2,511 | 2,427 | 3 | ||||||||||||||||||
Intermodal [a] | 1,541 | 1,284 | 20 | 1,403 | 1,267 | 11 | ||||||||||||||||||
Premium | 1,748 | 1,497 | 17 | 1,601 | 1,476 | 8 | ||||||||||||||||||
Average | $ | 2,686 | $ | 2,341 | 15 | % | $ | 2,519 | $ | 2,354 | 7 | % | ||||||||||||
[a] | For intermodal shipments each container or trailer equals one carload. |
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Condensed Consolidated Statements of Financial Position (unaudited) | ||||||||
Dec. 31, | Dec. 31, | |||||||
Millions, Except Percentages | 2021 | 2020 | ||||||
Assets | ||||||||
Cash and cash equivalents | $ | 960 | $ | 1,799 | ||||
Short-term investments | 46 | 60 | ||||||
Other current assets | 2,545 | 2,355 | ||||||
Investments | 2,241 | 2,164 | ||||||
Properties, net | 54,871 | 54,161 | ||||||
Operating lease assets | 1,787 | 1,610 | ||||||
Other assets | 1,075 | 249 | ||||||
Total assets | $ | 63,525 | $ | 62,398 | ||||
Liabilities and Common Shareholders' Equity | ||||||||
Debt due within one year | $ | 2,166 | $ | 1,069 | ||||
Other current liabilities | 3,578 | 3,104 | ||||||
Debt due after one year | 27,563 | 25,660 | ||||||
Operating lease liabilities | 1,429 | 1,283 | ||||||
Deferred income taxes | 12,675 | 12,247 | ||||||
Other long-term liabilities | 1,953 | 2,077 | ||||||
Total liabilities | 49,364 | 45,440 | ||||||
Total common shareholders' equity | 14,161 | 16,958 | ||||||
Total liabilities and common shareholders' equity | $ | 63,525 | $ | 62,398 | ||||
Return on Average Common Shareholders' Equity | 41.9 | % | 30.5 | % | ||||
Return on Invested Capital as Adjusted (ROIC)* | 16.4 | % | 13.9 | % | ||||
* | ROIC is a non-GAAP measure; however, management believes that it is an important measure in evaluating the efficiency and effectiveness of our long-term capital investments. See page 9 for a reconciliation to GAAP. |
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Condensed Consolidated Statements of Cash Flows (unaudited) | ||||||||
Millions, | Full Year | |||||||
For the Periods Ended December 31, | 2021 | 2020 | ||||||
Operating Activities | ||||||||
Net income | $ | 6,523 | $ | 5,349 | ||||
Depreciation | 2,208 | 2,210 | ||||||
Deferred and other income taxes | 154 | 340 | ||||||
Other - net | 147 | 641 | ||||||
Cash provided by operating activities | 9,032 | 8,540 | ||||||
Investing Activities | ||||||||
Capital investments* | (2,936) | (2,927) | ||||||
Maturities of short-term investments | 94 | 141 | ||||||
Purchases of short-term investments | (70) | (136) | ||||||
Other - net | 203 | 246 | ||||||
Cash used in investing activities | (2,709) | (2,676) | ||||||
Financing Activities | ||||||||
Share repurchase programs | (7,291) | (3,705) | ||||||
Debt issued | 4,201 | 4,004 | ||||||
Dividends paid | (2,800) | (2,626) | ||||||
Debt repaid | (1,299) | (2,053) | ||||||
Net issuance of commercial paper | 325 | (127) | ||||||
Debt exchange | (270) | (328) | ||||||
Other - net | (24) | (67) | ||||||
Cash used in financing activities | (7,158) | (4,902) | ||||||
Net Change in Cash, Cash Equivalents, and Restricted Cash | (835) | 962 | ||||||
Cash, cash equivalents, and restricted cash at beginning of year | 1,818 | 856 | ||||||
Cash, Cash Equivalents, and Restricted Cash at End of Year | $ | 983 | $ | 1,818 | ||||
Free Cash Flow** | ||||||||
Cash provided by operating activities | $ | 9,032 | $ | 8,540 | ||||
Cash used in investing activities | (2,709) | (2,676) | ||||||
Dividends paid | (2,800) | (2,626) | ||||||
Free cash flow | $ | 3,523 | $ | 3,238 | ||||
* | Capital investments include locomotive and freight car early lease buyouts of $34 million in 2021 and $38 million in 2020. |
** | 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) | ||||||||||||||||||||||||
4th Quarter | Full Year | |||||||||||||||||||||||
For the Periods Ended December 31, | 2021 | 2020 | % | 2021 | 2020 | % | ||||||||||||||||||
Operating/Performance Statistics | ||||||||||||||||||||||||
Freight car velocity (daily miles per car) | 197 | 223 | (12) | % | 203 | 221 | (8) | % | ||||||||||||||||
Average train speed (miles per hour) * | 24.2 | 26.1 | (7) | 24.6 | 25.9 | (5) | ||||||||||||||||||
Average terminal dwell time (hours) * | 24.4 | 22.4 | 9 | 23.7 | 22.7 | 4 | ||||||||||||||||||
Locomotive productivity (GTMs per horsepower day) | 129 | 142 | (9) | 133 | 137 | (3) | ||||||||||||||||||
Gross ton-miles (GTMs) (millions) | 209,970 | 202,844 | 4 | 817,919 | 771,765 | 6 | ||||||||||||||||||
Train length (feet) | 9,319 | 9,154 | 2 | 9,334 | 8,798 | 6 | ||||||||||||||||||
Intermodal car trip plan compliance (%) | 78 | 83 | (5) | pts | 73 | 81 | (8) | pts | ||||||||||||||||
Manifest/Automotive car trip plan compliance (%) | 58 | 74 | (16) | pts | 63 | 71 | (8) | pts | ||||||||||||||||
Workforce productivity (car miles per employee) | 1,046 | 1,032 | 1 | 1,038 | 947 | 10 | ||||||||||||||||||
Total employees (average) | 29,989 | 29,753 | 1 | 29,905 | 30,960 | (3) | ||||||||||||||||||
Locomotive Fuel Statistics | ||||||||||||||||||||||||
Average fuel price per gallon consumed | $ | 2.53 | $ | 1.45 | 74 | % | $ | 2.23 | $ | 1.50 | 49 | % | ||||||||||||
Fuel consumed in gallons (millions) | 228 | 222 | 3 | 888 | 849 | 5 | ||||||||||||||||||
Fuel consumption rate** | 1.088 | 1.092 | - | 1.086 | 1.100 | (1) | ||||||||||||||||||
Revenue Ton-Miles (Millions) | ||||||||||||||||||||||||
Grain & grain products | 21,656 | 21,591 | - | % | 79,520 | 71,979 | 10 | % | ||||||||||||||||
Fertilizer | 3,185 | 2,932 | 9 | 12,387 | 12,024 | 3 | ||||||||||||||||||
Food & refrigerated | 4,651 | 4,662 | - | 18,475 | 17,534 | 5 | ||||||||||||||||||
Coal & renewables | 22,795 | 18,128 | 26 | 85,586 | 76,695 | 12 | ||||||||||||||||||
Bulk | 52,287 | 47,313 | 11 | 195,968 | 178,232 | 10 | ||||||||||||||||||
Industrial chemicals & plastics | 7,257 | 7,465 | (3) | 30,048 | 28,095 | 7 | ||||||||||||||||||
Metals & minerals | 8,611 | 7,091 | 21 | 32,993 | 28,562 | 16 | ||||||||||||||||||
Forest products | 6,458 | 6,206 | 4 | 25,863 | 23,527 | 10 | ||||||||||||||||||
Energy & specialized markets | 9,420 | 9,200 | 2 | 37,902 | 36,527 | 4 | ||||||||||||||||||
Industrial | 31,746 | 29,962 | 6 | 126,806 | 116,711 | 9 | ||||||||||||||||||
Automotive | 3,830 | 4,337 | (12) | 14,879 | 14,835 | - | ||||||||||||||||||
Intermodal | 16,977 | 19,854 | (14) | 73,620 | 75,198 | (2) | ||||||||||||||||||
Premium | 20,807 | 24,191 | (14) | 88,499 | 90,033 | (2) | ||||||||||||||||||
Total | 104,840 | 101,466 | 3 | % | 411,273 | 384,976 | 7 | % | ||||||||||||||||
* | 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 Condensed Consolidated Statements of Income (unaudited) | ||||||||||||||||||||
2021 | ||||||||||||||||||||
Millions, Except Per Share Amounts and Percentages, | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Full Year | |||||||||||||||
Operating Revenues | ||||||||||||||||||||
Freight revenues | $ | 4,649 | $ | 5,132 | $ | 5,166 | $ | 5,297 | $ | 20,244 | ||||||||||
Other | 352 | 372 | 400 | 436 | 1,560 | |||||||||||||||
Total operating revenues | 5,001 | 5,504 | 5,566 | 5,733 | 21,804 | |||||||||||||||
Operating Expenses | ||||||||||||||||||||
Compensation and benefits | 1,026 | 1,022 | 1,040 | 1,070 | 4,158 | |||||||||||||||
Depreciation | 549 | 550 | 553 | 556 | 2,208 | |||||||||||||||
Fuel | 411 | 497 | 544 | 597 | 2,049 | |||||||||||||||
Purchased services and materials | 490 | 478 | 510 | 538 | 2,016 | |||||||||||||||
Equipment and other rents | 212 | 200 | 217 | 230 | 859 | |||||||||||||||
Other | 320 | 284 | 270 | 302 | 1,176 | |||||||||||||||
Total operating expenses | 3,008 | 3,031 | 3,134 | 3,293 | 12,466 | |||||||||||||||
Operating Income | 1,993 | 2,473 | 2,432 | 2,440 | 9,338 | |||||||||||||||
Other income | 51 | 125 | 38 | 83 | 297 | |||||||||||||||
Interest expense | (290) | (282) | (290) | (295) | (1,157) | |||||||||||||||
Income before income taxes | 1,754 | 2,316 | 2,180 | 2,228 | 8,478 | |||||||||||||||
Income taxes | (413) | (518) | (507) | (517) | (1,955) | |||||||||||||||
Net Income | $ | 1,341 | $ | 1,798 | $ | 1,673 | $ | 1,711 | $ | 6,523 | ||||||||||
Share and Per Share | ||||||||||||||||||||
Earnings per share - basic | $ | 2.01 | $ | 2.73 | $ | 2.58 | $ | 2.67 | $ | 9.98 | ||||||||||
Earnings per share - diluted | $ | 2.00 | $ | 2.72 | $ | 2.57 | $ | 2.66 | $ | 9.95 | ||||||||||
Weighted average number of shares - basic | 667.6 | 658.5 | 648.7 | 640.4 | 653.8 | |||||||||||||||
Weighted average number of shares - diluted | 669.2 | 660.1 | 650.3 | 642.1 | 655.4 | |||||||||||||||
Dividends declared per share | $ | 0.97 | $ | 1.07 | $ | 1.07 | $ | 1.18 | $ | 4.29 | ||||||||||
Operating Ratio | 60.1 | % | 55.1 | % | 56.3 | % | 57.4 | % | 57.2 | % | ||||||||||
Effective Tax Rate | 23.5 | % | 22.4 | % | 23.3 | % | 23.2 | % | 23.1 | % | ||||||||||
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Freight Revenues Statistics (unaudited) | ||||||||||||||||||||
2021 | ||||||||||||||||||||
1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Full Year | ||||||||||||||||
Freight Revenues (Millions) | ||||||||||||||||||||
Grain & grain products | $ | 766 | $ | 795 | $ | 731 | $ | 889 | $ | 3,181 | ||||||||||
Fertilizer | 170 | 179 | 172 | 176 | 697 | |||||||||||||||
Food & refrigerated | 235 | 251 | 253 | 259 | 998 | |||||||||||||||
Coal & renewables | 341 | 423 | 531 | 485 | 1,780 | |||||||||||||||
Bulk | 1,512 | 1,648 | 1,687 | 1,809 | 6,656 | |||||||||||||||
Industrial chemicals & plastics | 435 | 498 | 503 | 507 | 1,943 | |||||||||||||||
Metals & minerals | 375 | 467 | 488 | 481 | 1,811 | |||||||||||||||
Forest products | 316 | 348 | 342 | 351 | 1,357 | |||||||||||||||
Energy & specialized markets | 530 | 546 | 578 | 558 | 2,212 | |||||||||||||||
Industrial | 1,656 | 1,859 | 1,911 | 1,897 | 7,323 | |||||||||||||||
Automotive | 447 | 428 | 417 | 469 | 1,761 | |||||||||||||||
Intermodal | 1,034 | 1,197 | 1,151 | 1,122 | 4,504 | |||||||||||||||
Premium | 1,481 | 1,625 | 1,568 | 1,591 | 6,265 | |||||||||||||||
Total | $ | 4,649 | $ | 5,132 | $ | 5,166 | 5,297 | 20,244 | ||||||||||||
Revenue Carloads (Thousands) | ||||||||||||||||||||
Grain & grain products | 203 | 204 | 185 | 213 | 805 | |||||||||||||||
Fertilizer | 44 | 54 | 55 | 48 | 201 | |||||||||||||||
Food & refrigerated | 45 | 48 | 48 | 48 | 189 | |||||||||||||||
Coal & renewables | 174 | 198 | 232 | 215 | 819 | |||||||||||||||
Bulk | 466 | 504 | 520 | 524 | 2,014 | |||||||||||||||
Industrial chemicals & plastics | 140 | 156 | 153 | 157 | 606 | |||||||||||||||
Metals & minerals | 146 | 182 | 188 | 181 | 697 | |||||||||||||||
Forest products | 60 | 64 | 63 | 63 | 250 | |||||||||||||||
Energy & specialized markets | 139 | 138 | 145 | 137 | 559 | |||||||||||||||
Industrial | 485 | 540 | 549 | 538 | 2,112 | |||||||||||||||
Automotive | 180 | 173 | 166 | 182 | 701 | |||||||||||||||
Intermodal [a] | 796 | 878 | 809 | 728 | 3,211 | |||||||||||||||
Premium | 976 | 1,051 | 975 | 910 | 3,912 | |||||||||||||||
Total | 1,927 | 2,095 | 2,044 | 1,972 | 8,038 | |||||||||||||||
Average Revenue per Car | ||||||||||||||||||||
Grain & grain products | $ | 3,782 | $ | 3,894 | $ | 3,937 | $ | 4,187 | $ | 3,953 | ||||||||||
Fertilizer | 3,852 | 3,304 | 3,125 | 3,705 | 3,470 | |||||||||||||||
Food & refrigerated | 5,234 | 5,226 | 5,246 | 5,409 | 5,279 | |||||||||||||||
Coal & renewables | 1,958 | 2,134 | 2,298 | 2,251 | 2,173 | |||||||||||||||
Bulk | 3,246 | 3,266 | 3,244 | 3,457 | 3,305 | |||||||||||||||
Industrial chemicals & plastics | 3,113 | 3,189 | 3,277 | 3,242 | 3,207 | |||||||||||||||
Metals & minerals | 2,563 | 2,569 | 2,596 | 2,659 | 2,598 | |||||||||||||||
Forest products | 5,244 | 5,463 | 5,457 | 5,521 | 5,424 | |||||||||||||||
Energy & specialized markets | 3,828 | 3,944 | 3,996 | 4,054 | 3,956 | |||||||||||||||
Industrial | 3,417 | 3,442 | 3,482 | 3,522 | 3,467 | |||||||||||||||
Automotive | 2,485 | 2,479 | 2,500 | 2,576 | 2,511 | |||||||||||||||
Intermodal [a] | 1,299 | 1,363 | 1,424 | 1,541 | 1,403 | |||||||||||||||
Premium | 1,517 | 1,547 | 1,608 | 1,748 | 1,601 | |||||||||||||||
Average | $ | 2,413 | $ | 2,449 | $ | 2,528 | $ | 2,686 | $ | 2,519 | ||||||||||
[a] | For intermodal shipments each container or trailer equals one carload. |
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Non-GAAP Measures Reconciliation to GAAP | ||||||||||||
Adjusted Debt / Adjusted EBITDA* | ||||||||||||
Millions, Except Ratios | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||
for the Twelve Months Ended | 2021 | 2020 | 2019 | |||||||||
Net income | $ | 6,523 | $ | 5,349 | $ | 5,919 | ||||||
Add: | ||||||||||||
Income tax expense/(benefit) | 1,955 | 1,631 | 1,828 | |||||||||
Depreciation | 2,208 | 2,210 | 2,216 | |||||||||
Interest expense | 1,157 | 1,141 | 1,050 | |||||||||
EBITDA | $ | 11,843 | $ | 10,331 | $ | 11,013 | ||||||
Adjustments: | ||||||||||||
Other income, net | (297) | (287) | (243) | |||||||||
Interest on operating lease liabilities** | 56 | 59 | 68 | |||||||||
Adjusted EBITDA | $ | 11,602 | $ | 10,103 | $ | 10,838 | ||||||
Debt | $ | 29,729 | $ | 26,729 | $ | 25,200 | ||||||
Operating lease liabilities | 1,759 | 1,604 | 1,833 | |||||||||
Unfunded/(funded) pension and other postretirement benefits, | ||||||||||||
net of tax cost/(benefit) of ($21), $195, and $124 | (72) | 637 | 400 | |||||||||
Adjusted debt | $ | 31,416 | $ | 28,970 | $ | 27,433 | ||||||
Adjusted debt / Adjusted EBITDA | 2.7 | 2.9 | 2.5 | |||||||||
Comparable Adjusted Debt / Adjusted EBITDA* | ||||||||||||
Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||
2021 | 2020 | 2019 | ||||||||||
Adjusted debt / Adjusted EBITDA | 2.7 | 2.9 | 2.5 | |||||||||
Factors Affecting Comparability: | ||||||||||||
Brazos yard impairment [a] | N/A | (0.1) | N/A | |||||||||
Comparable Adjusted Debt / Adjusted EBITDA* | 2.7 | 2.8 | 2.5 | |||||||||
[a] | Adjustments remove the impact of $209 million from net income and $69 million from income tax expense for the year ended December 31, 2020. See page 10 for a reconciliation to GAAP. |
* | 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) and comparable adjusted debt to adjusted EBITDA are 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 these measures are 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 and comparable 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 and comparable adjusted debt to adjusted EBITDA. At December 31, 2021, 2020, and 2019, the incremental borrowing rate on operating lease liabilities was 3.2%, 3.7% and 3.7%, respectively. |
** | 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. |
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Non-GAAP Measures Reconciliation to GAAP | ||||||
Return on Average Common Shareholders' Equity | ||||||
Millions, Except Percentages | 2021 | 2020 | 2019 | |||
Net income | $ | 6,523 | $ | 5,349 | $ | 5,919 |
Average equity | $ | 15,560 | $ | 17,543 | $ | 19,276 |
Return on average common shareholders' equity | 41.9% | 30.5% | 30.7% | |||
Return on Invested Capital as Adjusted (ROIC)* | ||||||
Millions, Except Percentages | 2021 | 2020 | 2019 | |||
Net income | $ | 6,523 | $ | 5,349 | $ | 5,919 |
Interest expense | 1,157 | 1,141 | 1,050 | |||
Interest on average operating lease liabilities | 54 | 64 | 76 | |||
Taxes on interest | (280) | (282) | (266) | |||
Net operating profit after taxes as adjusted | $ | 7,454 | $ | 6,272 | $ | 6,779 |
Average equity | $ | 15,560 | $ | 17,543 | $ | 19,276 |
Average debt | 28,229 | 25,965 | 23,796 | |||
Average operating lease liabilities | 1,682 | 1,719 | 2,052 | |||
Average invested capital as adjusted | $ | 45,471 | $ | 45,227 | $ | 45,124 |
Return on invested capital as adjusted | 16.4% | 13.9% | 15.0% | |||
Comparable Return on Invested Capital as Adjusted (Comparable ROIC)* | ||||||
2021 | 2020 | 2019 | ||||
Return on invested capital as adjusted | 16.4% | 13.9% | 15.0% | |||
Factors Affecting Comparability: | ||||||
Brazos yard impairment [a] | N/A | 0.4 | N/A | |||
Comparable return on invested capital as adjusted | 16.4% | 14.3% | 15.0% | |||
[a] | Adjustments remove the impact of $209 million from both net income for the year ended and shareholders' equity as of December 31, 2020. See page 10 for a reconciliation to GAAP. |
* | ROIC and comparable ROIC are considered non-GAAP financial measures 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 these measures are important to management and investors in evaluating the efficiency and effectiveness of our long-term capital investments. In addition, we currently use ROIC as a performance criterion in determining certain elements of equity compensation for our executives. ROIC and comparable ROIC 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 return on average common shareholders' equity. The tables above provide reconciliations from return on average common shareholders' equity to ROIC and comparable ROIC. At December 31, 2021, 2020, and 2019, the incremental borrowing rate on operating leases was 3.2%, 3.7% and 3.7%, respectively. |
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Non-GAAP Measures Reconciliation to GAAP | |||||||||||||
Financial Performance* | |||||||||||||
Millions, Except Per Share Amounts and Percentages | Reported results | Brazos Yard | Adjusted results | ||||||||||
For the Three Months Ended December 31, 2020 | (GAAP) | Impairment | (non-GAAP) | ||||||||||
Operating expense | $ | 3,135 | $ | (278) | $ | 2,857 | |||||||
Operating income | 2,006 | 278 | 2,284 | ||||||||||
Income taxes | 413 | 69 | 482 | ||||||||||
Net income | 1,380 | 209 | 1,589 | ||||||||||
Diluted EPS | 2.05 | 0.31 | 2.36 | ||||||||||
Operating ratio | 61.0 | % | (5.4) | pts | 55.6 | % | |||||||
Millions, Except Per Share Amounts and Percentages | Reported results | Brazos Yard | Adjusted results | ||||||||||
(GAAP) | Impairment | (non-GAAP) | |||||||||||
For the Year Ended December 31, 2020 | |||||||||||||
Operating expense | $ | 11,699 | $ | (278) | $ | 11,421 | |||||||
Operating income | 7,834 | 278 | 8,112 | ||||||||||
Income taxes | 1,631 | 69 | 1,700 | ||||||||||
Net income | 5,349 | 209 | 5,558 | ||||||||||
Diluted EPS | 7.88 | 0.31 | 8.19 | ||||||||||
Operating ratio | 59.9 | % | (1.4) | pts | 58.5 | % | |||||||
As of December 31, 2020 | |||||||||||||
Shareholders' equity | $ | 16,958 | $ | 209 | $ | 17,167 | |||||||
* | The above tables reconcile our results for the three-months and year ended December 31, 2020, and as of December 31, 2020, to adjust results that exclude the impact of certain items identified as affecting comparability. We use adjusted operating expense, adjusted operating income, adjusted income taxes, adjusted net income, adjusted diluted earnings per share (EPS), adjusted operating ratio, and adjusted shareholders' equity, as applicable, among other measures, to evaluate our actual operating performance. We believe these non-GAAP financial measures provide valuable information regarding earnings and business trends by excluding specific items that we believe are not indicative of our ongoing operating results of our business, providing a useful way for investors to make a comparison of our performance over time and against other companies in our industry. Since these are not measures of performance calculated in accordance with GAAP, they should be considered in addition to, rather than as a substitute for, operating expense, operating income, income taxes, net income, diluted EPS, operating ratio, and shareholders' equity as indicators of operating performance. |
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SOURCE Union Pacific Corporation