OMAHA, Neb., Jan. 25, 2018 /PRNewswire/ -- Union Pacific
Corporation (NYSE: UNP) today reported 2017 fourth quarter net
income of $7.3 billion, or
$9.25 per diluted share compared to
$1.39 per diluted share in the fourth
quarter 2016. Fourth quarter 2017 results include
previously-disclosed adjustments reflecting the impact of corporate
tax reform. Excluding those items, 2017 fourth quarter
adjusted net income was $1.2 billion,
or $1.53 per diluted share, 5 and 10
percent increases, respectively, when compared to 2016.
Financial
Performance*
|
|
|
|
|
|
|
Millions,
Except Per Share Amounts and Percentages
For the Three Months Ended December
31, 2017
|
Operating
Income
|
Income
Taxes
|
Net
Income
|
Diluted
EPS
|
Operating
Ratio
|
Reported results
(GAAP)
|
$2,251
|
($5,186)
|
$7,278
|
$9.25
|
58.7%
|
Factors Affecting
Comparability:
(Adjustments for Tax
Cuts and Jobs Act)
|
|
Equity-method
affiliates
|
(212)
|
(73)
|
(139)
|
(0.18)
|
3.9 pts
|
Deferred
taxes
|
---
|
5,935
|
(5,935)
|
(7.54)
|
---
|
Adjusted results
(non-GAAP)
|
$2,039
|
$676
|
$1,204
|
$1.53
|
62.6%
|
2016 Reported
Results (GAAP)
|
$1,965
|
$687
|
$1,144
|
$1.39
|
62.0%
|
|
* Please
reference page 10 of the supplemental financial information for the
full non-GAAP disclosure.
|
"I am pleased with the results the men and women of Union
Pacific achieved by focusing on our six-track value strategy.
While we have room for improvement in many areas, that doesn't
include the dedication and hard work of our employees as they Build
America," said Lance Fritz, Union
Pacific chairman, president and chief executive officer.
Fourth Quarter Summary
Operating revenue of $5.5 billion
was up 5 percent in the fourth quarter 2017 compared to the fourth
quarter 2016. Fourth quarter business volumes, as measured by
total revenue carloads, increased 1 percent compared to 2016.
Volume increases in industrial products and chemicals more than
offset declines in agricultural products, automotive and
coal. Intermodal volume was flat compared to 2016. In
addition:
- Quarterly freight revenue increased 5 percent compared to the
fourth quarter 2016, as increased fuel surcharge revenue, core
pricing gains, positive volume and positive mix of traffic all
contributed to the increase.
- Union Pacific's adjusted operating ratio of 62.6 percent
increased 0.6 points compared to the fourth quarter 2016.
- The $2.03 per gallon average
quarterly diesel fuel price in the fourth quarter 2017 was 23
percent higher than the fourth quarter 2016.
- Quarterly train speed, as reported to the Association of
American Railroads, was 25.1 mph, 5 percent slower than the fourth
quarter 2016.
- Union Pacific repurchased 9.2 million shares in the fourth
quarter 2017 at an aggregate cost of $1.1
billion.
Summary of Fourth Quarter Freight Revenues
- Industrial Products up 28 percent
- Chemicals up 7 percent
- Intermodal up 4 percent
- Automotive down 1 percent
- Agricultural Products down 4 percent
- Coal down 5 percent
2017 Full Year Summary
For the full year 2017, Union Pacific reported net income of
$10.7 billion or $13.36 per diluted share, compared to
$4.2 billion, or $5.07 per diluted share in 2016. Excluding
the previously-disclosed adjustments reflecting the impact of
corporate tax reform, adjusted net income was $4.6 billion, or $5.79 per diluted share, 10 and 14 percent
increases, respectively, when compared to 2016.
Financial
Performance*
|
|
Millions,
Except Per Share Amounts and Percentages
For the Years Ended December 31,
2017
|
Operating
Income
|
Income
Taxes
|
Net
Income
|
Diluted
EPS
|
Operating
Ratio
|
Reported results
(GAAP)
|
$8,061
|
($3,080)
|
$10,712
|
$13.36
|
62.0%
|
Factors Affecting
Comparability:
(Adjustments for Tax
Cuts and Jobs Act)
|
|
Equity-method
affiliates
|
(212)
|
(73)
|
(139)
|
(0.17)
|
1.0 pts
|
Deferred
taxes
|
---
|
5,935
|
(5,935)
|
(7.40)
|
---
|
Adjusted results
(non-GAAP)
|
$7,849
|
$2,782
|
$4,638
|
$5.79
|
63.0%
|
2016 Reported
Results (GAAP)
|
$7,272
|
$2,533
|
$4,233
|
$5.07
|
63.5%
|
|
* Please
reference page 10 of the supplemental financial information for the
full non-GAAP disclosure.
|
Operating revenue totaled $21.2
billion as compared to $19.9
billion in 2016. Adjusted operating income totaled
$7.8 billion, an 8 percent increase
compared to 2016. In addition:
- Freight revenue totaled $19.8
billion, a 7 percent increase when compared to 2016.
Carloadings were up 2 percent versus 2016, with increases in
industrial products and coal business groups.
- Average diesel fuel prices increased 22 percent to $1.81 per gallon in 2017 from $1.48 per gallon in 2016.
- Union Pacific's adjusted operating ratio improved to 63.0
percent, 0.5 points lower than 2016.
- Train speed, as reported to the Association of American
Railroads, was 25.4 mph, 5 percent lower compared to the full year
2016.
- Union Pacific's reportable personal injury rate of 0.79
incidents per 200,000 employee hours increased 5 percent compared
to the full-year record achieved in 2016.
- Union Pacific's capital program in 2017 totaled $3.1 billion.
- Union Pacific repurchased 36.4 million shares in 2017 at an
aggregate cost of $4.0 billion.
2018 Outlook
"We are optimistic the economy will favor a number of our market
segments leading to another year of positive volume growth.
Increased unit volume, combined with inflation plus core pricing
and G55-0 productivity initiatives, should result in another year
of revenue growth and improved margins," said Fritz. "We will
continue to execute our value-track strategy to benefit our
employees, partner with the communities we serve, provide our
customers an excellent experience, and generate strong returns for
our shareholders."
Fourth Quarter 2017 Earnings Conference Call
Union Pacific will host its fourth quarter 2017 earnings release
presentation live over the Internet and via teleconference on
Thursday, January 25, 2018, at
8:45 a.m. Eastern Time. The
presentation will be webcast live over the internet on Union
Pacific's website at www.up.com/investor. Alternatively, the
webcast can be accessed directly through the following link.
Participants may join the conference call by dialing 877/407-8293
(or for international participants, 201/689-8349).
ABOUT UNION PACIFIC
Union Pacific Railroad is the principal operating company of
Union Pacific Corporation (NYSE: UNP). One of America's most
recognized companies, Union Pacific Railroad connects 23 states in
the western two-thirds of the country by rail, providing a critical
link in the global supply chain. In the past 10 years, 2008-2017,
Union Pacific invested approximately $34
billion in its network and operations to support America's
transportation infrastructure. The railroad's diversified
business mix includes Agricultural Products, Automotive, Chemicals,
Coal, Industrial Products and Intermodal. Union Pacific serves many
of the fastest-growing U.S. population centers, operates from all
major West Coast and Gulf Coast ports to eastern gateways, connects
with Canada's rail systems and is
the only railroad serving all six major Mexico gateways. Union Pacific provides value
to its roughly 10,000 customers by delivering products in a safe,
reliable, fuel-efficient and environmentally responsible
manner.
Supplemental financial information is attached.
This presentation and related materials contain statements
about the 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 generate financial returns, improve network
performance and customer service; implementation of corporate
strategies; and providing excellent service to its customers and
returns to its shareholders. These statements are, or will
be, forward-looking statements as defined by the Securities Act of
1933 and the Securities Exchange Act of 1934. Forward-looking
statements also generally include, without limitation, information
or statements regarding: projections, predictions,
expectations, estimates or forecasts as to the 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 2016, which was filed with the SEC on February 3, 2017. 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,
|
|
2017
|
|
|
2016
|
|
%
|
|
|
|
2017
|
|
|
2016
|
|
%
|
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight
revenues
|
$
|
5,087
|
|
$
|
4,832
|
|
5
|
%
|
|
$
|
19,837
|
|
$
|
18,601
|
|
7
|
%
|
Other
revenues
|
|
363
|
|
|
336
|
|
8
|
|
|
|
1,403
|
|
|
1,340
|
|
5
|
|
Total operating
revenues
|
|
5,450
|
|
|
5,168
|
|
5
|
|
|
|
21,240
|
|
|
19,941
|
|
7
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
1,232
|
|
|
1,186
|
|
4
|
|
|
|
4,984
|
|
|
4,750
|
|
5
|
|
Purchased services and
materials
|
|
585
|
|
|
553
|
|
6
|
|
|
|
2,363
|
|
|
2,258
|
|
5
|
|
Depreciation
|
|
532
|
|
|
520
|
|
2
|
|
|
|
2,105
|
|
|
2,038
|
|
3
|
|
Fuel
|
|
547
|
|
|
431
|
|
27
|
|
|
|
1,891
|
|
|
1,489
|
|
27
|
|
Equipment and other
rents
|
|
64
|
|
|
280
|
|
(77)
|
|
|
|
888
|
|
|
1,137
|
|
(22)
|
|
Other
|
|
239
|
|
|
233
|
|
3
|
|
|
|
948
|
|
|
997
|
|
(5)
|
|
Total operating
expenses
|
|
3,199
|
|
|
3,203
|
|
-
|
|
|
|
13,179
|
|
|
12,669
|
|
4
|
|
Operating
Income
|
|
2,251
|
|
|
1,965
|
|
15
|
|
|
|
8,061
|
|
|
7,272
|
|
11
|
|
Other
income
|
|
29
|
|
|
40
|
|
(28)
|
|
|
|
290
|
|
|
192
|
|
51
|
|
Interest
expense
|
|
(188)
|
|
|
(174)
|
|
8
|
|
|
|
(719)
|
|
|
(698)
|
|
3
|
|
Income before
income taxes
|
|
2,092
|
|
|
1,831
|
|
14
|
|
|
|
7,632
|
|
|
6,766
|
|
13
|
|
Income tax
benefit/(expense)
|
|
5,186
|
|
|
(687)
|
|
F
|
|
|
|
3,080
|
|
|
(2,533)
|
|
F
|
|
Net
Income
|
$
|
7,278
|
|
$
|
1,144
|
|
F
|
|
|
$
|
10,712
|
|
$
|
4,233
|
|
F
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share and
Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
|
9.29
|
|
$
|
1.40
|
|
F
|
|
|
$
|
13.42
|
|
$
|
5.09
|
|
F
|
|
Earnings per share -
diluted
|
$
|
9.25
|
|
$
|
1.39
|
|
F
|
|
|
$
|
13.36
|
|
$
|
5.07
|
|
F
|
|
Weighted average
number of shares - basic
|
|
783.6
|
|
|
819.2
|
|
(4)
|
%
|
|
|
798.4
|
|
|
832.4
|
|
(4)
|
%
|
Weighted average
number of shares - diluted
|
|
787.0
|
|
|
822.7
|
|
(4)
|
|
|
|
801.7
|
|
|
835.4
|
|
(4)
|
|
Dividends declared per
share
|
$
|
0.665
|
|
$
|
0.605
|
|
10
|
|
|
$
|
2.48
|
|
$
|
2.255
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Ratio
|
|
58.7
|
%
|
|
62.0
|
%
|
(3.3)
|
pts
|
|
|
62.0
|
%
|
|
63.5
|
%
|
(1.5)
|
pts
|
Effective
Tax Rate
|
|
(247.9)
|
%
|
|
37.5
|
%
|
F
|
|
|
|
(40.4)
|
%
|
|
37.4
|
%
|
F
|
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Freight Revenues
Statistics (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4th
Quarter
|
|
Full
Year
|
For the
Periods Ended December 31,
|
2017
|
2016
|
%
|
|
|
2017
|
2016
|
%
|
|
Freight
Revenues (Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
922
|
$
|
961
|
(4)
|
%
|
|
$
|
3,685
|
$
|
3,625
|
2
|
%
|
Automotive
|
|
512
|
|
517
|
(1)
|
|
|
|
1,998
|
|
2,000
|
-
|
|
Chemicals
|
|
917
|
|
857
|
7
|
|
|
|
3,596
|
|
3,474
|
4
|
|
Coal
|
|
667
|
|
699
|
(5)
|
|
|
|
2,645
|
|
2,440
|
8
|
|
Industrial
Products
|
|
1,062
|
|
829
|
28
|
|
|
|
4,078
|
|
3,348
|
22
|
|
Intermodal
|
|
1,007
|
|
969
|
4
|
|
|
|
3,835
|
|
3,714
|
3
|
|
Total
|
$
|
5,087
|
$
|
4,832
|
5
|
%
|
|
$
|
19,837
|
$
|
18,601
|
7
|
%
|
Revenue
Carloads (Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
|
239
|
|
258
|
(7)
|
%
|
|
|
958
|
|
980
|
(2)
|
%
|
Automotive
|
|
211
|
|
219
|
(4)
|
|
|
|
838
|
|
863
|
(3)
|
|
Chemicals
|
|
270
|
|
257
|
5
|
|
|
|
1,055
|
|
1,074
|
(2)
|
|
Coal
|
|
312
|
|
320
|
(3)
|
|
|
|
1,232
|
|
1,166
|
6
|
|
Industrial
Products
|
|
309
|
|
265
|
17
|
|
|
|
1,227
|
|
1,097
|
12
|
|
Intermodal*
|
|
826
|
|
827
|
-
|
|
|
|
3,278
|
|
3,262
|
-
|
|
Total
|
|
2,167
|
|
2,146
|
1
|
%
|
|
|
8,588
|
|
8,442
|
2
|
%
|
Average
Revenue per Car
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
3,856
|
$
|
3,732
|
3
|
%
|
|
$
|
3,847
|
$
|
3,702
|
4
|
%
|
Automotive
|
|
2,426
|
|
2,362
|
3
|
|
|
|
2,384
|
|
2,317
|
3
|
|
Chemicals
|
|
3,403
|
|
3,323
|
2
|
|
|
|
3,410
|
|
3,234
|
5
|
|
Coal
|
|
2,136
|
|
2,183
|
(2)
|
|
|
|
2,146
|
|
2,092
|
3
|
|
Industrial
Products
|
|
3,434
|
|
3,123
|
10
|
|
|
|
3,324
|
|
3,051
|
9
|
|
Intermodal*
|
|
1,220
|
|
1,172
|
4
|
|
|
|
1,170
|
|
1,138
|
3
|
|
Average
|
$
|
2,348
|
$
|
2,251
|
4
|
%
|
|
$
|
2,310
|
$
|
2,203
|
5
|
%
|
|
|
*
|
Each intermodal
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
|
2017
|
2016
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,275
|
$
|
1,277
|
Short-term
investments
|
|
90
|
|
60
|
Other current
assets
|
|
2,673
|
|
2,259
|
Investments
|
|
1,809
|
|
1,457
|
Net
properties
|
|
51,605
|
|
50,389
|
Other
assets
|
|
354
|
|
276
|
Total
assets
|
$
|
57,806
|
$
|
55,718
|
|
|
|
|
|
Liabilities
and Common Shareholders' Equity
|
|
|
|
|
Debt due within one
year
|
$
|
800
|
$
|
758
|
Other current
liabilities
|
|
3,139
|
|
2,882
|
Debt due after one
year
|
|
16,144
|
|
14,249
|
Deferred income
taxes
|
|
10,936
|
|
15,996
|
Other long-term
liabilities
|
|
1,931
|
|
1,901
|
Total
liabilities
|
|
32,950
|
|
35,786
|
Total common
shareholders' equity
|
|
24,856
|
|
19,932
|
Total
liabilities and common shareholders' equity
|
$
|
57,806
|
$
|
55,718
|
|
|
|
|
|
Debt to
Capital
|
|
40.5%
|
|
43.0%
|
Adjusted
Debt to Capital*
|
|
43.9%
|
|
47.3%
|
Return on
Average Common Shareholders' Equity
|
|
47.8%
|
|
20.8%
|
Return on
Invested Capital as Adjusted (ROIC)**
|
|
27.6%
|
|
12.7%
|
|
|
*
|
Adjusted Debt to
Capital is a non-GAAP measure; however, management believes that it
is an important measure in evaluating the total amount of leverage
in our capital structure, including off-balance sheet lease
obligations. See page 8 for a reconciliation to GAAP.
|
**
|
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,
|
2017
|
2016
|
Operating
Activities
|
|
|
|
|
Net income
|
$
|
10,712
|
$
|
4,233
|
Depreciation
|
|
2,105
|
|
2,038
|
Deferred income
taxes
|
|
(5,067)
|
|
831
|
Other - net
|
|
(520)
|
|
423
|
Cash provided
by operating activities
|
|
7,230
|
|
7,525
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
Capital
investments*
|
|
(3,257)
|
|
(3,505)
|
Purchases of
short-term investments
|
|
(120)
|
|
(580)
|
Maturities of
short-term investments
|
|
90
|
|
520
|
Other - net
|
|
201
|
|
172
|
Cash used in
investing activities
|
|
(3,086)
|
|
(3,393)
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
Common shares
repurchased
|
|
(4,013)
|
|
(3,105)
|
Debt issued
|
|
2,735
|
|
1,983
|
Dividends
paid
|
|
(1,982)
|
|
(1,879)
|
Debt repaid
|
|
(840)
|
|
(1,013)
|
Debt
exchange
|
|
-
|
|
(191)
|
Other - net
|
|
(46)
|
|
(41)
|
Cash used in
financing activities
|
|
(4,146)
|
|
(4,246)
|
|
|
|
|
|
Net Change
in Cash and Cash Equivalents
|
|
(2)
|
|
(114)
|
Cash and cash
equivalents at beginning of year
|
|
1,277
|
|
1,391
|
Cash and
Cash Equivalents at End of Year
|
$
|
1,275
|
$
|
1,277
|
|
|
|
|
|
Free Cash
Flow**
|
|
|
|
|
Cash provided by
operating activities
|
$
|
7,230
|
$
|
7,525
|
Cash used in investing
activities
|
|
(3,086)
|
|
(3,393)
|
Dividends
paid
|
|
(1,982)
|
|
(1,879)
|
Free cash
flow
|
$
|
2,162
|
$
|
2,253
|
|
|
*
|
Capital investments
include locomotive and freight car early lease buyouts of $173
million in 2017 and $90 million in 2016.
|
**
|
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,
|
2017
|
2016
|
%
|
|
|
2017
|
2016
|
%
|
|
Operating/Performance
Statistics
|
|
|
|
|
|
|
|
|
|
Gross ton-miles (GTMs)
(millions)
|
229,597
|
223,839
|
3
|
%
|
|
898,746
|
856,895
|
5
|
%
|
Employees
(average)
|
41,589
|
42,214
|
(1)
|
|
|
41,992
|
42,919
|
(2)
|
|
GTMs (millions) per
employee
|
5.52
|
5.30
|
4
|
|
|
21.40
|
19.97
|
7
|
|
|
|
|
|
|
|
|
|
|
|
Locomotive
Fuel Statistics
|
|
|
|
|
|
|
|
|
|
Average fuel price per
gallon consumed
|
$
2.03
|
$
1.65
|
23
|
%
|
|
$
1.81
|
$
1.48
|
22
|
%
|
Fuel consumed in
gallons (millions)
|
260
|
253
|
3
|
|
|
1,004
|
974
|
3
|
|
Fuel consumption
rate*
|
1.135
|
1.131
|
-
|
|
|
1.117
|
1.137
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
AAR Reported
Performance Measures
|
|
|
|
|
|
|
|
|
|
Average train speed
(miles per hour)
|
25.1
|
26.5
|
(5)
|
%
|
|
25.4
|
26.6
|
(5)
|
%
|
Average terminal dwell
time (hours)
|
32.5
|
29.0
|
12
|
|
|
30.3
|
28.1
|
8
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
Ton-Miles (Millions)
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
22,406
|
24,153
|
(7)
|
%
|
|
89,897
|
92,244
|
(3)
|
%
|
Automotive
|
4,581
|
4,705
|
(3)
|
|
|
18,288
|
18,192
|
1
|
|
Chemicals
|
17,190
|
16,132
|
7
|
|
|
66,449
|
66,964
|
(1)
|
|
Coal
|
33,459
|
33,487
|
-
|
|
|
130,603
|
117,101
|
12
|
|
Industrial
Products
|
21,963
|
17,082
|
29
|
|
|
84,163
|
68,579
|
23
|
|
Intermodal
|
19,251
|
19,559
|
(2)
|
|
|
77,321
|
77,059
|
-
|
|
Total
|
118,850
|
115,118
|
3
|
%
|
|
466,721
|
440,139
|
6
|
%
|
|
|
*
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
Millions,
Except Per Share Amounts and Percentages,
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
Full
Year
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
Freight
revenues
|
$
|
4,794
|
|
4,906
|
|
5,050
|
|
5,087
|
$
|
19,837
|
Other
revenues
|
|
338
|
|
344
|
|
358
|
|
363
|
|
1,403
|
Total operating
revenues
|
|
5,132
|
|
5,250
|
|
5,408
|
|
5,450
|
|
21,240
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
1,257
|
|
1,197
|
|
1,298
|
|
1,232
|
|
4,984
|
Purchased services and
materials
|
|
566
|
|
597
|
|
615
|
|
585
|
|
2,363
|
Depreciation
|
|
520
|
|
525
|
|
528
|
|
532
|
|
2,105
|
Fuel
|
|
460
|
|
434
|
|
450
|
|
547
|
|
1,891
|
Equipment and other
rents
|
|
276
|
|
273
|
|
275
|
|
64
|
|
888
|
Other
|
|
260
|
|
219
|
|
230
|
|
239
|
|
948
|
Total operating
expenses
|
|
3,339
|
|
3,245
|
|
3,396
|
|
3,199
|
|
13,179
|
Operating
Income
|
|
1,793
|
|
2,005
|
|
2,012
|
|
2,251
|
|
8,061
|
Other
income
|
|
67
|
|
43
|
|
151
|
|
29
|
|
290
|
Interest
expense
|
|
(172)
|
|
(179)
|
|
(180)
|
|
(188)
|
|
(719)
|
Income before
income taxes
|
|
1,688
|
|
1,869
|
|
1,983
|
|
2,092
|
|
7,632
|
Income tax
benefit/(expense)
|
|
(616)
|
|
(701)
|
|
(789)
|
|
5,186
|
|
3,080
|
Net
Income
|
$
|
1,072
|
$
|
1,168
|
$
|
1,194
|
$
|
7,278
|
$
|
10,712
|
|
|
|
|
|
|
|
|
|
|
|
Share and
Per Share
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
|
1.32
|
$
|
1.45
|
$
|
1.50
|
$
|
9.29
|
$
|
13.42
|
Earnings per share -
diluted
|
$
|
1.32
|
$
|
1.45
|
$
|
1.50
|
$
|
9.25
|
$
|
13.36
|
Weighted average
number of shares - basic
|
|
811.5
|
|
804.1
|
|
794.5
|
|
783.6
|
|
798.4
|
Weighted average
number of shares - diluted
|
|
814.8
|
|
807.2
|
|
797.6
|
|
787.0
|
|
801.7
|
Dividends declared per
share
|
$
|
0.605
|
$
|
0.605
|
$
|
0.605
|
$
|
0.665
|
$
|
2.48
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Ratio
|
|
65.1%
|
|
61.8%
|
|
62.8%
|
|
58.7%
|
|
62.0%
|
Effective
Tax Rate
|
|
36.5%
|
|
37.5%
|
|
39.8%
|
|
(247.9%)
|
|
(40.4%)
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Freight Revenues
Statistics (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
Full
Year
|
Freight
Revenues (Millions)
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
942
|
$
|
907
|
$
|
914
|
$
|
922
|
$
|
3,685
|
Automotive
|
|
504
|
|
513
|
|
469
|
|
512
|
|
1,998
|
Chemicals
|
|
885
|
|
898
|
|
896
|
|
917
|
|
3,596
|
Coal
|
|
648
|
|
619
|
|
711
|
|
667
|
|
2,645
|
Industrial
Products
|
|
907
|
|
1,030
|
|
1,079
|
|
1,062
|
|
4,078
|
Intermodal
|
|
908
|
|
939
|
|
981
|
|
1,007
|
|
3,835
|
Total
|
$
|
4,794
|
$
|
4,906
|
$
|
5,050
|
$
|
5,087
|
$
|
19,837
|
Revenue
Carloads (Thousands)
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
|
250
|
|
237
|
|
232
|
|
239
|
|
958
|
Automotive
|
|
212
|
|
215
|
|
200
|
|
211
|
|
838
|
Chemicals
|
|
257
|
|
269
|
|
259
|
|
270
|
|
1,055
|
Coal
|
|
304
|
|
285
|
|
331
|
|
312
|
|
1,232
|
Industrial
Products
|
|
278
|
|
315
|
|
325
|
|
309
|
|
1,227
|
Intermodal*
|
|
787
|
|
824
|
|
841
|
|
826
|
|
3,278
|
Total
|
|
2,088
|
|
2,145
|
|
2,188
|
|
2,167
|
|
8,588
|
Average
Revenue per Car
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
3,773
|
$
|
3,813
|
$
|
3,951
|
$
|
3,856
|
$
|
3,847
|
Automotive
|
|
2,373
|
|
2,393
|
|
2,341
|
|
2,426
|
|
2,384
|
Chemicals
|
|
3,448
|
|
3,334
|
|
3,457
|
|
3,403
|
|
3,410
|
Coal
|
|
2,134
|
|
2,173
|
|
2,143
|
|
2,136
|
|
2,146
|
Industrial
Products
|
|
3,261
|
|
3,271
|
|
3,325
|
|
3,434
|
|
3,324
|
Intermodal*
|
|
1,154
|
|
1,140
|
|
1,166
|
|
1,220
|
|
1,170
|
Average
|
$
|
2,297
|
$
|
2,287
|
$
|
2,307
|
$
|
2,348
|
$
|
2,310
|
|
|
*
|
Each intermodal
container or trailer equals one carload.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Non-GAAP Measures
Reconciliation to GAAP
|
|
|
|
|
|
Debt to
Capital*
|
|
|
|
|
|
Dec.
31,
|
Dec.
31,
|
Millions,
Except Percentages
|
2017
|
2016
|
Debt
(a)
|
$
|
16,944
|
$
|
15,007
|
Equity
|
|
24,856
|
|
19,932
|
Capital
(b)
|
$
|
41,800
|
$
|
34,939
|
Debt to capital
(a/b)
|
|
40.5%
|
|
43.0%
|
|
|
*
|
Total debt divided by
total debt plus equity. We believe this measure is important to
management and investors in evaluating our balance sheet strength
and is important in managing our credit ratios and financing
relationships.
|
Adjusted
Debt to Capital, Reconciliation to GAAP*
|
|
|
|
|
|
Dec.
31,
|
Dec.
31,
|
Millions,
Except Percentages
|
2017
|
2016
|
Debt
|
$
|
16,944
|
$
|
15,007
|
Net present
value of operating leases
|
|
2,140
|
|
2,435
|
Unfunded
pension and OPEB, net of taxes of $238 and $261
|
|
396
|
|
436
|
Adjusted debt
(a)
|
|
19,480
|
|
17,878
|
Equity
|
|
24,856
|
|
19,932
|
Adjusted
capital (b)
|
$
|
44,336
|
$
|
37,810
|
Adjusted debt
to capital (a/b)
|
|
43.9%
|
|
47.3%
|
|
|
*
|
Total debt plus net
present value of operating leases plus after-tax unfunded pension
and OPEB obligation divided by total debt plus net present value of
operating leases plus after-tax unfunded pension and OPEB
obligation plus equity. Operating leases were discounted using 4.6%
at December 31, 2017, and 4.7% at December 31, 2016. The discount
rate reflects our effective interest rate. We believe this measure
is important to management and investors in evaluating the total
amount of leverage in our capital structure including off-balance
sheet lease obligations.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Non-GAAP Measures
Reconciliation to GAAP
|
|
|
|
|
|
|
|
Return on
Average Common Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions,
Except Percentages
|
2017
|
2016
|
2015
|
Net
income
|
$
|
10,712
|
$
|
4,233
|
$
|
4,772
|
Average
equity
|
$
|
22,394
|
$
|
20,317
|
$
|
20,946
|
Return on
average common shareholders' equity
|
|
47.8%
|
|
20.8%
|
|
22.8%
|
|
|
|
|
|
|
|
Return on
Invested Capital as Adjusted (ROIC)*
|
|
|
|
|
|
|
|
|
|
|
Millions,
Except Percentages
|
2017
|
2016
|
2015
|
Net
income
|
$
|
10,712
|
$
|
4,233
|
$
|
4,772
|
Interest
expense
|
|
719
|
|
698
|
|
622
|
Interest on
average present value of operating leases
|
|
105
|
|
121
|
|
135
|
Taxes on
interest
|
|
(309)
|
|
(306)
|
|
(285)
|
Net operating
profit after taxes as adjusted (a)
|
$
|
11,227
|
$
|
4,746
|
$
|
5,244
|
Average
equity
|
$
|
22,394
|
$
|
20,317
|
$
|
20,946
|
Average
debt
|
|
15,976
|
|
14,604
|
|
12,807
|
Average present
value of operating leases
|
|
2,288
|
|
2,581
|
|
2,814
|
Average
invested capital as adjusted (b)
|
$
|
40,658
|
$
|
37,502
|
$
|
36,567
|
Return on
invested capital as adjusted (a/b)
|
|
27.6%
|
|
12.7%
|
|
14.3%
|
|
|
*
|
ROIC 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 efficiency and
effectiveness of our long-term capital investments. In addition, we
currently use ROIC as a performance criteria in determining certain
elements of equity compensation for our executives. 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.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Non-GAAP Measures
Reconciliation to GAAP
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Performance*
|
|
|
|
|
|
|
|
|
|
|
Millions,
Except Per Share Amounts and Percentages
For the
Three Months Ended December 31, 2017
|
|
Operating
Income
|
|
Income
Taxes
|
|
Net
Income
|
|
Diluted
EPS
|
Operating
Ratio
|
Reported
results (GAAP)
|
$
|
2,251
|
$
|
(5,186)
|
$
|
7,278
|
$
|
9.25
|
58.7
|
%
|
Factors
Affecting Comparability:
|
|
|
|
|
|
|
|
|
|
|
Adjustments for
Tax Cuts and Jobs Act
|
|
|
|
|
|
|
|
|
|
|
Equity-method
affiliates
|
|
(212)
|
|
(73)
|
|
(139)
|
|
(0.18)
|
3.9
|
pts
|
Deferred
taxes
|
|
-
|
|
5,935
|
|
(5,935)
|
|
(7.54)
|
-
|
|
Adjusted
results (non-GAAP)
|
$
|
2,039
|
$
|
676
|
$
|
1,204
|
$
|
1.53
|
62.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions,
Except Per Share Amounts and Percentages
For the Year
Ended December 31, 2017
|
|
Operating
Income
|
|
Income
Taxes
|
|
Net
Income
|
|
Diluted
EPS
|
Operating
Ratio
|
Reported
results (GAAP)
|
$
|
8,061
|
$
|
(3,080)
|
$
|
10,712
|
$
|
13.36
|
62.0
|
%
|
Factors
Affecting Comparability:
|
|
|
|
|
|
|
|
|
|
|
Adjustments for
Tax Cuts and Jobs Act
|
|
|
|
|
|
|
|
|
|
|
Equity-method
affiliates
|
|
(212)
|
|
(73)
|
|
(139)
|
|
(0.17)
|
1.0
|
pts
|
Deferred
taxes
|
|
-
|
|
5,935
|
|
(5,935)
|
|
(7.40)
|
-
|
|
Adjusted
results (non-GAAP)
|
$
|
7,849
|
$
|
2,782
|
$
|
4,638
|
$
|
5.79
|
63.0
|
%
|
|
|
*
|
The above tables
reconcile our results for the quarter and year ended December 31,
2017 to adjusted results that exclude the impact of certain items
identified as affecting comparability. We use adjusted operating
income, adjusted income taxes, adjusted net income, adjusted
diluted earnings per share ("EPS") and adjusted operating ratio, as
applicable, among other measures, to evaluate our actual operating
performance. We believe these non-GAAP measures provide relevant
and useful information for management and investors because they
clarify our actual operating performance by excluding certain
significant items that are not considered indicative of future
financial trends and allow investors to review performance in the
same way as our management. 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 income, income taxes, net income, diluted EPS, and
operating ratio, as indicators of operating performance.
|
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SOURCE Union Pacific Corporation