The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from PR Newswire

Union Pacific Reports Record First Quarter

Thursday, April 18, 2013

Union Pacific Reports Record First Quarter

08:00 EDT Thursday, April 18, 2013

Diluted Earnings per Share up 13 Percent

OMAHA, Neb., April 18, 2013 /PRNewswire/ --

First Quarter Records

  • Diluted earnings per share of $2.03 improved 13 percent.
  • Operating revenues totaled $5.3 billion, up 3 percent.
  • Operating income totaled $1.6 billion, up 8 percent.
  • Operating ratio of 69.1 percent improved 1.4 points.
  • Customer satisfaction index reached 94, up 1 point.

(Logo: http://photos.prnewswire.com/prnh/20110304/LA59497LOGO)

Union Pacific Corporation (NYSE: UNP) today reported 2013 first quarter net income of $957 million, or $2.03 per diluted share, compared to $863 million, or $1.79 per diluted share, in the first quarter 2012. 

"Union Pacific achieved record first quarter financial results, leveraging the strengths of our diverse franchise despite significantly weaker coal and grain markets," said Jack Koraleski, Union Pacific chief executive officer.  "We efficiently managed our operations in the face of dynamic volume shifts across the network, as evidenced by our record first quarter operating ratio and customer satisfaction results."

First Quarter Summary

Despite lower carloadings, operating revenue increased 3 percent in the first quarter 2013 to $5.3 billion versus $5.1 billion in the first quarter 2012.  First quarter business volumes, as measured by total revenue carloads, decreased 2 percent compared to 2012.  Volume declines in coal and agricultural products more than offset growth in chemicals, intermodal and automotive shipments.  Volumes for industrial products were flat versus 2012 driven by a reduction in hazardous waste shipments.  In addition:

  • Quarterly freight revenue increased 3 percent compared to the first quarter 2012, mainly driven by core pricing gains.
  • Union Pacific's operating ratio of 69.1 percent was a first quarter record, 1.4 points better than the first quarter 2012. 
  • The average quarterly diesel fuel price of $3.23 per gallon in the first quarter 2013 was flat compared to the first quarter 2012. 
  • The Customer Satisfaction Index of 94 set a first quarter record, 1 point better than the first quarter 2012.
  • Quarterly train speed, as reported to the Association of American Railroads, was 26.4 mph, flat versus the first quarter 2012. 
  • The Company repurchased 2.9 million shares in the first quarter 2013 at an average share price of $136.58 and an aggregate cost of $394 million.

Summary of First Quarter Freight Revenues

  • Chemicals up 14 percent
  • Automotive up 13 percent
  • Intermodal up 9 percent
  • Industrial Products up 6 percent
  • Coal down 6 percent
  • Agricultural down 9 percent

2013 Outlook

"While there is still much uncertainty in the year ahead, our diverse franchise supports our continued focus on profitable growth and business development opportunities," Koraleski said.  "We're committed to providing safe, efficient and reliable service to drive greater customer value and increased shareholder returns in the future."

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 links 23 states in the western two-thirds of the country by rail, providing a critical link in the global supply chain. From 2007-2012, Union Pacific invested $18 billion in its network and operations to support America's transportation infrastructure, including a record $3.7 billion in 2012.  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.

Investor contact is Michelle Gerhardt, (402) 544-4227.

Media contact is Tom Lange, (402) 544-3560.

Supplemental financial information is attached.

This press release 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 general economic conditions and business growth; its ability to provide safe, efficient and reliable customer service and increase customer value and shareholder returns.  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 2012, which was filed with the SEC on February 8, 2013.  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,

1st Quarter

 For the Periods Ended March 31,

2013

2012

%

 Operating Revenues

      Freight revenues

$

4,984

$

4,823

3%

      Other revenues

306

289

6

 Total operating revenues

5,290

5,112

3

 Operating Expenses

      Compensation and benefits

1,216

1,211

-

      Fuel

900

926

(3)

      Purchased services and materials

557

526

6

      Depreciation

434

427

2

      Equipment and other rents

313

296

6

      Other

237

216

10

 Total operating expenses

3,657

3,602

2

 Operating Income

1,633

1,510

8

      Other income

40

16

       F

      Interest expense

(128)

(135)

(5)

 Income before income taxes

1,545

1,391

11

 Income taxes

(588)

(528)

11

 Net Income

$

957

$

863

11%

 Share and Per Share

      Earnings per share - basic

$

2.05

$

1.81

13%

      Earnings per share - diluted

$

2.03

$

1.79

13

      Weighted average number of shares - basic

467.8

477.8

(2)

      Weighted average number of shares - diluted

470.5

481.4

(2)

      Dividends declared per share

$

0.69

$

0.60

15

 Operating Ratio

69.1%

70.5%

(1.4) pts

 Effective Tax Rate

38.1%

38.0%

0.1 pts

 

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Freight Revenues Statistics (unaudited)

1st Quarter

For the Periods Ending March 31,

2013

2012

%

Freight Revenues (Millions)

Agricultural

$

784

$

858

(9)

%

Automotive

487

430

13

Chemicals

873

768

14

Coal

936

995

(6)

Industrial Products

916

863

6

Intermodal

988

909

9

Total

$

4,984

$

4,823

3

%

Revenue Carloads (Thousands)

Agricultural

212

234

(9)

%

Automotive

184

180

2

Chemicals

271

241

12

Coal

402

495

(19)

Industrial Products

289

290

-

Intermodal*

810

778

4

Total

2,168

2,218

(2)

%

Average Revenue per Car

Agricultural

$

3,694

$

3,664

1

%

Automotive

2,648

2,390

11

Chemicals

3,225

3,184

1

Coal

2,329

2,010

16

Industrial Products

3,174

2,977

7

Intermodal*

1,219

1,169

4

Average

$

2,299

$

2,175

6

%

* Each intermodal 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

2013

2012

Assets

     Cash and cash equivalents

$

1,917

$

1,063

     Other current assets

2,729

2,551

     Investments

1,240

1,259

     Net properties

42,376

41,997

     Other assets

299

283

Total assets

$

48,561

$

47,153

Liabilities and Common Shareholders' Equity

     Debt due within one year

$

552

$

196

     Other current liabilities

3,058

2,923

     Debt due after one year

9,309

8,801

     Deferred income taxes

13,288

13,108

     Other long-term liabilities

2,210

2,248

Total liabilities

28,417

27,276

Total common shareholders' equity

20,144

19,877

Total liabilities and common shareholders' equity

$

48,561

$

47,153

Debt to Capital

32.9%

31.2%

Adjusted Debt to Capital*

40.2%

39.1%

*

Adjusted Debt to Capital is a non-GAAP measure; however, we believe that it is important in evaluating our financial performance. See page 6 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 Ending March 31,

2013

2012

Operating Activities

     Net income

$

957

$

863

     Depreciation

434

427

     Deferred income taxes

184

124

     Other - net

(51)

(10)

Cash provided by operating activities

1,524

1,404

Investing Activities

     Capital investments

(782)

(804)

     Other - net

(18)

(26)

Cash used in investing activities

(800)

(830)

Financing Activities

     Debt issued

944

-

     Common shares repurchased

(374)

(433)

     Dividends paid

(323)

(289)

     Debt repaid

(83)

(72)

     Other - net

(34)

(2)

Cash provided by/(used in) financing activities

130

(796)

Net Change in Cash and Cash Equivalents

854

(222)

Cash and cash equivalents at beginning of year

1,063

1,217

Cash and Cash Equivalents End of Period

$

1,917

$

995

Free Cash Flow*

     Cash provided by operating activities

$

1,524

$

1,404

     Cash used in investing activities

(800)

(830)

     Dividends paid

(323)

(289)

Free cash flow

$

401

$

285

 

*

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

 

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Operating and Performance Statistics (unaudited)

1st Quarter

For the Periods Ending March 31,

2013

2012

%

Operating/Performance Statistics

     Gross ton-miles (GTMs) (millions)

227,688

240,484

(5)

%

     Employees (average)

46,437

45,642

2

     GTMs (millions) per employee

4.90

5.27

(7)

     Customer satisfaction index

94

93

1

pt

Locomotive Fuel Statistics

     Average fuel price per gallon consumed

$ 3.23

$ 3.23

-

%

     Fuel consumed in gallons (millions)

272

279

(3)

     Fuel consumption rate*

1.195

1.160

3

AAR Reported Performance Measures

     Average train speed (miles per hour)

26.4

26.3

-

%

     Average terminal dwell time (hours)

27.4

26.4

4

     Average rail car inventory (thousands)

263.8

275.4

(4)

Revenue Ton-Miles (Millions)

     Agricultural

19,459

21,909

(11)

%

     Automotive

3,848

3,657

5

     Chemicals

18,601

16,045

16

     Coal

43,720

54,379

(20)

     Industrial Products

18,759

17,688

6

     Intermodal

19,576

19,029

3

Total

123,963

132,707

(7)

%

 

*

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

Debt to Capital*

Mar. 31,

Dec. 31,

Millions, Except Percentages

2013

2012

Debt (a)

$

9,861

$

8,997

Equity

20,144

19,877

Capital (b)

$

30,005

$

28,874

Debt to capital (a/b)

32.9%

31.2%

 

*

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

2013

2012

Debt

$

9,861

$

8,997

Net present value of operating leases

3,044

3,096

Unfunded pension and OPEB

662

679

Adjusted debt (a)

13,567

12,772

Equity

20,144

19,877

Adjusted capital (b)

$

33,711

$

32,649

Adjusted debt to capital (a/b)

40.2%

39.1%

 

*

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 5.6% at March 31, 2013 and 6.0% at December 31, 2012. The discount rate reflects our effective interest rate. Management believes this is an important measure to management and investors in evaluating the total amount of leverage in our capital structure including off-balance sheet obligations.

 

SOURCE Union Pacific Corporation

Products
  • Globe Unlimited

    Digital all access pass across devices. subscribe

  • The Globe and Mail Newspaper

    Newspaper delivered to your doorstep. subscribe

  • Globe2Go

    The digital replica of our newspaper. subscribe

  • Globe eBooks

    A collection of articles by the Globe. subscribe

See all Globe Products

Advertise with us

GlobeLink.ca

Your number one partner for reaching Canada's Influential Achievers. learn more

The Globe at your Workplace
Our Company
Customer Service
Globe Recognition
Mobile Apps
NEWS APP
INVESTING APP
Other Sections