UNION PACIFIC CORP - FORM 8-K - EX-99.1

Attached files

file	filename
8-K - FORM 8-K - UNION PACIFIC CORP	d567920d8k.htm

Exhibit 99.1

Union Pacific Reports Best-Ever Quarterly Results

Diluted Earnings per Share up 13 Percent

FOR IMMEDIATE RELEASE

Best-Ever Quarterly Records

•

Diluted earnings per share of $2.37 improved 13 percent.

•

Operating revenues totaled $5.5 billion, up 5 percent.

•

Operating income totaled $1.9 billion, up 9 percent.

•

Operating ratio of 65.7 percent improved 1.3 points.

Omaha, Neb., July 18, 2013 – Union Pacific Corporation (NYSE: UNP) today reported 2013 second quarter net income of $1.1 billion, or $2.37 per diluted share, compared to $1 billion, or $2.10 per diluted share, in the second quarter 2012.

“Union Pacific achieved record financial milestones this quarter,” said Jack Koraleski, Union Pacific chief executive officer. “We managed our network efficiently and continued to show the agility of our strong franchise. When combined with solid core pricing gains, we more than offset the slight shortfall in volumes to generate best-ever quarterly earnings and operating ratio performance.”

-more-

-2-

Second Quarter Summary

Despite lower carloadings, operating revenue increased 5 percent in the second quarter 2013 to $5.5 billion versus $5.2 billion in the second quarter 2012. Second quarter business volumes, as measured by total revenue carloads, decreased 1 percent compared to 2012. Volume declines in agricultural products and intermodal shipments more than offset growth in chemicals and automotive shipments. Volumes for industrial products and coal shipments were flat versus 2012. In addition:

•

Quarterly freight revenue increased 5 percent compared to the second quarter 2012, driven by core pricing gains.

•

Union Pacific’s operating ratio of 65.7 percent was a best-ever quarterly record, 1.3 points better than the second quarter 2012 and 0.9 points better than the previous best-ever quarterly record set in the third quarter 2012.

•

The average quarterly diesel fuel price of $3.10 per gallon in the second quarter 2013 was down 3 percent compared to the second quarter 2012.

•

The Customer Satisfaction Index of 93 tied the second quarter 2012 record.

•

Quarterly train speed, as reported to the Association of American Railroads, was 25.7 mph, down 3 percent versus the second quarter 2012.

•

The Company repurchased nearly 3.1 million shares in the second quarter 2013 at an average share price of $151.42 and an aggregate cost of $463 million.

Summary of Second Quarter Freight Revenues

•

Automotive up 12 percent

•

Chemicals up 12 percent

•

Coal up 12 percent

•

Industrial Products up 7 percent

•

Intermodal down 1 percent

•

Agricultural down 8 percent

-more-

-3-

2013 Outlook

“As we move into the second half of the year, the economic outlook remains uncertain, but we’re hopeful that we’ll see some economic improvement in the months ahead,” Koraleski said. “Union Pacific is well positioned with our diverse franchise and strong value proposition. We’ll continue focusing on reinvestible pricing; attracting new, profitable growth opportunities; and running a safe, efficient, and reliable network that generates greater value for both our customers and shareholders going forward.”

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.

-more-

-4-

****

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, future economic improvement, and business growth and its ability to capitalize on any future economic improvement; obtain reinvestible pricing; develop new business; provide safe, efficient and reliable service; and generate value for our customers and 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 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,	*2nd Quarter*								*Year-to-Date*
For the Periods Ended June 30,	*2013*		2012			%			*2013*		2012		%
Operating Revenues
Freight revenues	$	5,153	$	4,913			5	%	$	10,137	$	9,736		4	%
Other revenues		317		308			3			623		597		4
Total operating revenues		5,470		5,221			5			10,760		10,333		4

Operating Expenses
Compensation and benefits		1,185		1,151			3			2,401		2,362		2
Fuel		863		882			(2)			1,763		1,808		(2)
Purchased services and materials		585		542			8			1,142		1,068		7
Depreciation		438		433			1			872		860		1
Equipment and other rents		302		299			1			615		595		3
Other		219		190			15			456		406		12
Total operating expenses		3,592		3,497			3			7,249		7,099		2

Operating Income		1,878		1,724			9			3,511		3,234		9
Other income		23		21			10			63		37		70
Interest expense		(133)		(135)			(1)			(261)		(270)		(3)

Income before income taxes		1,768		1,610			10			3,313		3,001		10
Income taxes		(662)		(608)			9			(1,250)		(1,136)		10

Net Income	$	1,106	$	1,002			10	%	$	2,063	$	1,865		11	%




Share and Per Share
Earnings per share - basic	$	2.38	$	2.11			13	%	$	4.42	$	3.92		13	%
Earnings per share - diluted	$	2.37	$	2.10			13		$	4.40	$	3.89		13
Weighted average number of shares - basic		465.3		473.8			(2)			466.6		475.8		(2)
Weighted average number of shares - diluted		467.6		477.2			(2)			469.1		479.3		(2)
Dividends declared per share	$	0.69	$	0.60			15		$	1.38	$	1.20		15



Operating Ratio		65.7%		67.0	%		(1.3)	pts		67.4%		68.7%		(1.3)	pts
Effective Tax Rate		37.4%		37.8	%		(0.4)	pts		37.7%		37.9%		(0.2)	pts

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Freight Revenues Statistics (unaudited)


	*2nd Quarter*							*Year-to-Date*
For the Periods Ended June 30,	*2013*		2012		%			*2013*		2012		%
*Freight Revenues (Millions)*
Agricultural	$	784	$	854		(8)	%	$	1,568	$	1,712		(8)	%
Automotive		534		475		12			1,021		905		13
Chemicals		890		795		12			1,763		1,563		13
Coal		975		869		12			1,911		1,864		3
Industrial Products		977		917		7			1,893		1,780		6
Intermodal		993		1,003		(1)			1,981		1,912		4
Total	$	5,153	$	4,913		5	%	$	10,137	$	9,736		4	%

*Revenue Carloads (Thousands)*
Agricultural		209		233		(10)	%		421		467		(10)	%
Automotive		197		190		4			381		370		3
Chemicals		287		261		10			558		502		11
Coal		414		412		-			816		907		(10)
Industrial Products		317		316		-			606		606		-
Intermodal*		822		846		(3)			1,632		1,624		-
Total		2,246		2,258		(1)	%		4,414		4,476		(1)	%

*Average Revenue per Car*
Agricultural	$	3,750	$	3,665		2	%	$	3,721	$	3,665		2	%
Automotive		2,715		2,505		8			2,683		2,449		10
Chemicals		3,098		3,044		2			3,160		3,111		2
Coal		2,353		2,109		12			2,341		2,055		14
Industrial Products		3,079		2,907		6			3,124		2,941		6
Intermodal*		1,210		1,185		2			1,214		1,177		3
Average	$	2,295	$	2,176		5	%	$	2,297	$	2,175		6	%

*	Each intermodal container or trailer equals one carload.

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Condensed Consolidated Statements of Financial Position (unaudited)


Millions, Except Percentages	June 30, 2013		Dec. 31, 2012
Assets
Cash and cash equivalents	$	1,845	$	1,063
Other current assets		2,698		2,551
Investments		1,272		1,259
Net properties		42,911		41,997
Other assets		300		283
Total assets	$	49,026	$	47,153




Liabilities and Common Shareholders’ Equity
Debt due within one year	$	733	$	196
Other current liabilities		3,092		2,923
Debt due after one year		9,076		8,801
Deferred income taxes		13,477		13,108
Other long-term liabilities		2,124		2,248
Total liabilities		28,502		27,276

Total common shareholders’ equity		20,524		19,877

Total liabilities and common shareholders’ equity	$	49,026	$	47,153




Debt to Capital		32.3%		31.2%
Adjusted Debt to Capital*		39.6%		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 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 June 30,	*2013*		2012
Operating Activities
Net income	$	2,063	$	1,865
Depreciation		872		860
Deferred income taxes		365		274
Other - net		(82)		(223)
Cash provided by operating activities		3,218		2,776




Investing Activities
Capital investments		(1,730)		(1,816)
Other - net		(9)		(66)
Cash used in investing activities		(1,739)		(1,882)




Financing Activities
Debt issued		944		695
Common shares repurchased		(833)		(833)
Dividends paid		(646)		(575)
Debt repaid		(139)		(193)
Other - net		(23)		(4)
Cash used in financing activities		(697)		(910)




Net Change in Cash and Cash Equivalents		782		(16)
Cash and cash equivalents at beginning of year		1,063		1,217
Cash and Cash Equivalents End of Period	$	1,845	$	1,201




Free Cash Flow*
Cash provided by operating activities	$	3,218	$	2,776
Cash used in investing activities		(1,739)		(1,882)
Dividends paid		(646)		(575)
Free cash flow	$	833	$	319

*	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)


	*2nd Quarter*							*Year-to-Date*
For the Periods Ended June 30,	*2013*		2012		%			*2013*		2012		%
Operating/Performance Statistics
Gross ton-miles (GTMs) (millions)		235,396		234,483		-	%		463,084		474,967		(3)	%
Employees (average)		46,787		45,797		2			46,612		45,720		2
GTMs (millions) per employee		5.03		5.12		(2)			9.93		10.39		(4)
Customer satisfaction index		93		93		-	pts		93		93		-	pts



Locomotive Fuel Statistics
Average fuel price per gallon consumed		$ 3.10		$ 3.21		(3)	%		$ 3.16		$ 3.22		(2)	%
Fuel consumed in gallons (millions)		271		265		2			543		544		-
Fuel consumption rate*		1.151		1.132		2			1.173		1.146		2



AAR Reported Performance Measures
Average train speed (miles per hour)		25.7		26.6		(3)	%		26.1		26.5		(2)	%
Average terminal dwell time (hours)		26.6		25.5		4			27.0		26.0		4
Average rail car inventory (thousands)		261.6		268.6		(3)			262.7		272.0		(3)



Revenue Ton-Miles (Millions)
Agricultural		18,796		21,212		(11)	%		38,255		43,121		(11)	%
Automotive		4,088		3,860		6			7,936		7,517		6
Chemicals		19,069		16,793		14			37,670		32,838		15
Coal		45,992		46,322		(1)			89,712		100,701		(11)
Industrial Products		19,813		18,455		7			38,572		36,143		7
Intermodal		19,656		19,987		(2)			39,232		39,016		1
Total		127,414		126,629		1	%		251,377		259,336		(3)	%

*	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)


	*2013*
Millions, Except Per Share Amounts and Percentages	*1st Qtr*		*2nd Qtr*		*Year-to-Date*
Operating Revenues
Freight revenues	$	4,984	$	5,153	$	10,137
Other revenues		306		317		623
Total operating revenues		5,290		5,470		10,760

Operating Expenses
Compensation and benefits		1,216		1,185		2,401
Fuel		900		863		1,763
Purchased services and materials		557		585		1,142
Depreciation		434		438		872
Equipment and other rents		313		302		615
Other		237		219		456
Total operating expenses		3,657		3,592		7,249

Operating Income		1,633		1,878		3,511
Other income		40		23		63
Interest expense		(128)		(133)		(261)
Income before income taxes		1,545		1,768		3,313
Income tax expense		(588)		(662)		(1,250)
Net Income	$	957	$	1,106	$	2,063




Share and Per Share
Earnings per share - basic	$	2.05	$	2.38	$	4.42
Earnings per share - diluted	$	2.03	$	2.37	$	4.40
Weighted average number of shares - basic		467.8		465.3		466.6
Weighted average number of shares - diluted		470.5		467.6		469.1
Dividends declared per share	$	0.69	$	0.69	$	1.38



Operating Ratio		69.1%		65.7%		67.4%
Effective Tax Rate		38.1%		37.4%		37.7%

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Freight Revenues Statistics (unaudited)


	*2013*
	*1st Qtr*		*2nd Qtr*		*Year-to-Date*
*Freight Revenues (Millions)*
Agricultural	$	784	$	784	$	1,568
Automotive		487		534		1,021
Chemicals		873		890		1,763
Coal		936		975		1,911
Industrial Products		916		977		1,893
Intermodal		988		993		1,981
Total	$	4,984	$	5,153	$	10,137

*Revenue Carloads (Thousands)*
Agricultural		212		209		421
Automotive		184		197		381
Chemicals		271		287		558
Coal		402		414		816
Industrial Products		289		317		606
Intermodal*		810		822		1,632
Total		2,168		2,246		4,414

*Average Revenue per Car*
Agricultural	$	3,694	$	3,750	$	3,721
Automotive		2,648		2,715		2,683
Chemicals		3,225		3,098		3,160
Coal		2,329		2,353		2,341
Industrial Products		3,174		3,079		3,124
Intermodal*		1,219		1,210		1,214
Average	$	2,299	$	2,295	$	2,297

*	Each intermodal container or trailer equals one carload.

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Non-GAAP Measures Reconciliation to GAAP


Debt to Capital*
Millions, Except Percentages	June 30, 2013		Dec. 31, 2012
Debt (a)	$	9,809	$	8,997
Equity		20,524		19,877
Capital (b)	$	30,333	$	28,874

Debt to capital (a/b)		32.3%		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*
Millions, Except Percentages	June 30, 2013		Dec. 31, 2012
Debt	$	9,809	$	8,997
Net present value of operating leases		3,038		3,096
Unfunded pension and OPEB		629		679
Adjusted debt (a)		13,476		12,772
Equity		20,524		19,877
Adjusted capital (b)	$	34,000	$	32,649

Adjusted debt to capital (a/b)		39.6%		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 June 30, 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.

Attached files

Stock widget

Investing forum

UNION PACIFIC CORP Reports