OMAHA, Neb., Oct. 25, 2018 /PRNewswire/ --
Third Quarter Results
- Diluted earnings per share of $2.15 increased 43 percent.
- Operating income totaled $2.3
billion, up 9 percent.
- Operating ratio of 61.7 percent, flat with third quarter
2017 (see footnote 1).
Union Pacific Corporation (NYSE: UNP) today reported 2018 third
quarter net income of $1.6 billion,
or a third quarter record $2.15 per
diluted share. This compares to $1.2
billion, or $1.50 per diluted
share, in the third quarter 2017.
"While we reported solid financial results, we did not make the
service and productivity gains that we expected during the quarter.
However, we are making progress implementing our new Unified Plan
2020 and we are well positioned to drive improvement going
forward," said Lance Fritz, Union
Pacific chairman, president and chief executive officer. "I am
confident we have the right people and plans in place to improve
our operations, provide more reliable service for our customers,
and achieve industry-leading financial performance."
Third Quarter Summary
Operating revenue of $5.9 billion
was up 10 percent in the third quarter 2018 compared to the third
quarter 2017. Third quarter carloads increased 6 percent compared
to 2017. Volume increases in industrial, premium, and agricultural
products more than offset declines in energy. In addition:
- Quarterly freight revenue improved 10 percent compared to the
third quarter 2017, as volume growth, higher fuel surcharge
revenue, and core pricing gains were partially offset by negative
mix of traffic.
- Union Pacific's 61.7 percent operating ratio was flat (see
footnote) compared to the third quarter 2017.
- The $2.38 per gallon average
quarterly diesel fuel price in the third quarter 2018 was 34
percent higher than the third quarter 2017.
- Quarterly train speed, as reported to the Association of
American Railroads, was 24.0 mph, 6 percent slower than the third
quarter 2017.
- Union Pacific's year-to-date reportable personal injury rate of
0.77 per 200,000 employee hours improved 1 percent compared to the
year-to-date rate achieved in 2017.
- The Company repurchased 2.2 million shares in the third quarter
2018.
Summary of Third Quarter Freight Revenues
- Energy up 1 percent
- Agricultural Products up 6 percent
- Industrial up 13 percent
- Premium up 18 percent
Outlook
"Looking ahead, I am confident that the recent progress we have
made on our Unified Plan 2020 will accelerate in the near
term. As we move forward with its implementation, along with
other G55 + 0 initiatives, we will regain our productivity momentum
and improve the value proposition for all of our stakeholders,"
Fritz said.
Footnote 1: Certain prior
period amounts have been adjusted for the retrospective adoption of
Accounting Standard Update 2017-07 related to the presentation of
the components of net periodic pension and other postretirement
benefit costs.
Third Quarter 2018 Earnings Conference Call
Union Pacific will host its third quarter 2018 earnings release
presentation live over the Internet and via teleconference on
Thursday, October 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, Energy, Industrial and Premium.
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; its ability to
generate financial returns; improve resource productivity;
enhancing the customer experience; implementing 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 2017, which was filed with the SEC on February 9, 2018. 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,
|
3rd
Quarter
|
|
Year-to-Date
|
For the
Periods Ended September 30,
|
2018
|
2017
|
%
|
|
|
2018
|
2017
|
%
|
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight
revenues
|
$
|
5,558
|
$
|
5,050
|
10
|
%
|
|
$
|
15,997
|
$
|
14,750
|
8
|
%
|
Other
|
|
370
|
|
358
|
3
|
|
|
|
1,078
|
|
1,040
|
4
|
|
Total operating
revenues
|
|
5,928
|
|
5,408
|
10
|
|
|
|
17,075
|
|
15,790
|
8
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits*
|
|
1,262
|
|
1,237
|
2
|
|
|
|
3,776
|
|
3,703
|
2
|
|
Fuel
|
|
659
|
|
450
|
46
|
|
|
|
1,891
|
|
1,344
|
41
|
|
Purchased services and
materials
|
|
632
|
|
615
|
3
|
|
|
|
1,861
|
|
1,778
|
5
|
|
Depreciation
|
|
547
|
|
528
|
4
|
|
|
|
1,636
|
|
1,573
|
4
|
|
Equipment and other
rents
|
|
272
|
|
275
|
(1)
|
|
|
|
803
|
|
824
|
(3)
|
|
Other
|
|
287
|
|
230
|
25
|
|
|
|
801
|
|
709
|
13
|
|
Total operating
expenses
|
|
3,659
|
|
3,335
|
10
|
|
|
|
10,768
|
|
9,931
|
8
|
|
Operating
Income
|
|
2,269
|
|
2,073
|
9
|
|
|
|
6,307
|
|
5,859
|
8
|
|
Other
income*
|
|
48
|
|
90
|
(47)
|
|
|
|
48
|
|
212
|
(77)
|
|
Interest
expense
|
|
(241)
|
|
(180)
|
34
|
|
|
|
(630)
|
|
(531)
|
19
|
|
Income before
income taxes
|
|
2,076
|
|
1,983
|
5
|
|
|
|
5,725
|
|
5,540
|
3
|
|
Income
taxes
|
|
(483)
|
|
(789)
|
(39)
|
|
|
|
(1,313)
|
|
(2,106)
|
(38)
|
|
Net
Income
|
$
|
1,593
|
$
|
1,194
|
33
|
%
|
|
$
|
4,412
|
$
|
3,434
|
28
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share and
Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
|
2.16
|
$
|
1.50
|
44
|
%
|
|
$
|
5.82
|
$
|
4.27
|
36
|
%
|
Earnings per share -
diluted
|
$
|
2.15
|
$
|
1.50
|
43
|
|
|
$
|
5.79
|
$
|
4.26
|
36
|
|
Weighted average
number of shares - basic
|
|
737.4
|
|
794.5
|
(7)
|
|
|
|
758.1
|
|
803.4
|
(6)
|
|
Weighted average
number of shares - diluted
|
|
740.9
|
|
797.6
|
(7)
|
|
|
|
761.4
|
|
806.5
|
(6)
|
|
Dividends declared per
share
|
$
|
0.80
|
$
|
0.605
|
32
|
|
|
$
|
2.26
|
$
|
1.815
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Ratio*
|
|
61.7%
|
|
61.7%
|
-
|
pts
|
|
|
63.1%
|
|
62.9%
|
0.2
|
pts
|
Effective
Tax Rate
|
|
23.3%
|
|
39.8%
|
(16.5)
|
pts
|
|
|
22.9%
|
|
38.0%
|
(15.1)
|
pts
|
|
*
|
Certain prior period
amounts have been adjusted for the retrospective adoption of
Accounting Standard Update 2017-07 related to the presentation of
the components of net periodic pension and other postretirement
benefit costs.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Freight Revenues
Statistics (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd
Quarter
|
|
Year-to-Date
|
For the
Periods Ended September 30,
|
2018
|
2017
|
%
|
|
|
2018
|
2017
|
%
|
|
Freight
Revenues (Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
1,133
|
$
|
1,072
|
6
|
%
|
|
$
|
3,345
|
$
|
3,230
|
4
|
%
|
Energy
|
|
1,214
|
|
1,204
|
1
|
|
|
|
3,498
|
|
3,285
|
6
|
|
Industrial
|
|
1,497
|
|
1,324
|
13
|
|
|
|
4,274
|
|
3,922
|
9
|
|
Premium
|
|
1,714
|
|
1,450
|
18
|
|
|
|
4,880
|
|
4,313
|
13
|
|
Total
|
$
|
5,558
|
$
|
5,050
|
10
|
%
|
|
$
|
15,997
|
$
|
14,750
|
8
|
%
|
Revenue
Carloads (Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
|
285
|
|
280
|
2
|
%
|
|
|
849
|
|
859
|
(1)
|
%
|
Energy
|
|
440
|
|
448
|
(2)
|
|
|
|
1,246
|
|
1,234
|
1
|
|
Industrial
|
|
458
|
|
419
|
9
|
|
|
|
1,321
|
|
1,249
|
6
|
|
Premium
[a]
|
|
1,133
|
|
1,041
|
9
|
|
|
|
3,250
|
|
3,079
|
6
|
|
Total
|
|
2,316
|
|
2,188
|
6
|
%
|
|
|
6,666
|
|
6,421
|
4
|
%
|
Average
Revenue per Car
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
3,973
|
$
|
3,827
|
4
|
%
|
|
$
|
3,939
|
$
|
3,760
|
5
|
%
|
Energy
|
|
2,757
|
|
2,690
|
2
|
|
|
|
2,807
|
|
2,663
|
5
|
|
Industrial
|
|
3,269
|
|
3,159
|
3
|
|
|
|
3,236
|
|
3,140
|
3
|
|
Premium
|
|
1,513
|
|
1,392
|
9
|
|
|
|
1,501
|
|
1,401
|
7
|
|
Average
|
$
|
2,399
|
$
|
2,307
|
4
|
%
|
|
$
|
2,400
|
$
|
2,297
|
4
|
%
|
|
[a]
|
For intermodal
shipments each container or trailer equals one carload.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Condensed
Consolidated Statements of Financial Position
(unaudited)
|
|
|
|
|
|
|
Sep.
30,
|
Dec.
31,
|
Millions,
Except Percentages
|
2018
|
2017
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,810
|
$
|
1,275
|
Short-term
investments
|
|
90
|
|
90
|
Other current
assets
|
|
2,916
|
|
2,641
|
Investments
|
|
1,887
|
|
1,809
|
Net
properties
|
|
52,210
|
|
51,605
|
Other
assets
|
|
399
|
|
386
|
Total
assets
|
$
|
59,312
|
$
|
57,806
|
|
|
|
|
|
Liabilities
and Common Shareholders' Equity
|
|
|
|
|
Debt due within one
year
|
$
|
1,468
|
$
|
800
|
Other current
liabilities
|
|
3,061
|
|
3,139
|
Debt due after one
year
|
|
20,943
|
|
16,144
|
Deferred income
taxes
|
|
11,270
|
|
10,936
|
Other long-term
liabilities
|
|
1,925
|
|
1,931
|
Total
liabilities
|
|
38,667
|
|
32,950
|
Total common
shareholders' equity
|
|
20,645
|
|
24,856
|
Total
liabilities and common shareholders' equity
|
$
|
59,312
|
$
|
57,806
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Condensed
Consolidated Statements of Cash Flows (unaudited)
|
|
|
|
|
|
Millions,
|
Year-to-Date
|
For the
Periods Ended September 30,
|
2018
|
2017
|
Operating
Activities
|
|
|
|
|
Net income
|
$
|
4,412
|
$
|
3,434
|
Depreciation
|
|
1,636
|
|
1,573
|
Deferred income
taxes
|
|
312
|
|
514
|
Other - net
|
|
14
|
|
(123)
|
Cash provided
by operating activities
|
|
6,374
|
|
5,398
|
Investing
Activities
|
|
|
|
|
Capital
investments
|
|
(2,428)
|
|
(2,379)
|
Purchases of
short-term investments
|
|
(90)
|
|
(90)
|
Maturities of
short-term investments
|
|
90
|
|
60
|
Other - net
|
|
(6)
|
|
149
|
Cash used in
investing activities
|
|
(2,434)
|
|
(2,260)
|
Financing
Activities
|
|
|
|
|
Share repurchase
programs
|
|
(7,024)
|
|
(2,882)
|
Debt issued
|
|
6,992
|
|
2,285
|
Debt repaid
|
|
(1,807)
|
|
(471)
|
Dividends
paid
|
|
(1,716)
|
|
(1,460)
|
Net issuance of
commercial paper
|
|
195
|
|
-
|
Other - net
|
|
(45)
|
|
(40)
|
Cash used in
financing activities
|
|
(3,405)
|
|
(2,568)
|
Net Change
in Cash and Cash Equivalents
|
|
535
|
|
570
|
Cash and cash
equivalents at beginning of year
|
|
1,275
|
|
1,277
|
Cash and
Cash Equivalents at End of Period
|
$
|
1,810
|
$
|
1,847
|
Free Cash
Flow*
|
|
|
|
|
Cash provided by
operating activities
|
$
|
6,374
|
$
|
5,398
|
Cash used in investing
activities
|
|
(2,434)
|
|
(2,260)
|
Dividends
paid
|
|
(1,716)
|
|
(1,460)
|
Free cash
flow
|
$
|
2,224
|
$
|
1,678
|
|
*
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd
Quarter
|
|
Year-to-Date
|
For the
Periods Ended September 30,
|
2018
|
|
2017
|
%
|
|
|
2018
|
|
2017
|
%
|
|
Operating/Performance
Statistics
|
|
|
|
|
|
|
|
|
|
|
|
Gross ton-miles (GTMs)
(millions)
|
240,183
|
|
229,791
|
5
|
%
|
|
698,050
|
|
671,547
|
4
|
%
|
Employees
(average)
|
42,323
|
|
42,056
|
1
|
|
|
42,057
|
|
42,127
|
-
|
|
GTMs (millions) per
employee
|
5.67
|
|
5.46
|
4
|
|
|
16.60
|
|
15.94
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Locomotive
Fuel Statistics
|
|
|
|
|
|
|
|
|
|
|
|
Average fuel price per
gallon consumed
|
$
2.38
|
|
$
1.77
|
34
|
%
|
|
$
2.27
|
|
$
1.74
|
30
|
%
|
Fuel consumed in
gallons (millions)
|
266
|
|
245
|
9
|
|
|
803
|
|
744
|
8
|
|
Fuel consumption
rate*
|
1.109
|
|
1.063
|
4
|
|
|
1.151
|
|
1.107
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AAR Reported
Performance Measures
|
|
|
|
|
|
|
|
|
|
|
|
Average train speed
(miles per hour)
|
24.0
|
|
25.4
|
(6)
|
%
|
|
24.5
|
|
25.5
|
(4)
|
%
|
Average terminal dwell
time (hours)
|
29.3
|
|
30.0
|
(2)
|
|
|
30.6
|
|
29.6
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
Ton-Miles (Millions)
|
|
|
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
25,911
|
|
24,708
|
5
|
%
|
|
76,992
|
|
75,944
|
1
|
%
|
Energy
|
45,190
|
|
46,032
|
(2)
|
|
|
129,154
|
|
126,535
|
2
|
|
Industrial
|
25,899
|
|
24,467
|
6
|
|
|
75,939
|
|
73,615
|
3
|
|
Premium
|
26,313
|
|
23,763
|
11
|
|
|
76,264
|
|
71,777
|
6
|
|
Total
|
123,313
|
|
118,970
|
4
|
%
|
|
358,349
|
|
347,871
|
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)
|
|
|
|
|
|
|
|
|
|
|
2018
|
Millions,
Except Per Share Amounts and Percentages,
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
Year-to-Date
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
Freight
revenues
|
$
|
5,122
|
$
|
5,317
|
$
|
5,558
|
$
|
15,997
|
Other
revenues
|
|
353
|
|
355
|
|
370
|
|
1,078
|
Total operating
revenues
|
|
5,475
|
|
5,672
|
|
5,928
|
|
17,075
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
1,273
|
|
1,241
|
|
1,262
|
|
3,776
|
Fuel
|
|
589
|
|
643
|
|
659
|
|
1,891
|
Purchased services and
materials
|
|
599
|
|
630
|
|
632
|
|
1,861
|
Depreciation
|
|
543
|
|
546
|
|
547
|
|
1,636
|
Equipment and other
rents
|
|
266
|
|
265
|
|
272
|
|
803
|
Other
|
|
266
|
|
248
|
|
287
|
|
801
|
Total operating
expenses
|
|
3,536
|
|
3,573
|
|
3,659
|
|
10,768
|
Operating
Income
|
|
1,939
|
|
2,099
|
|
2,269
|
|
6,307
|
Other
income/(expense)
|
|
(42)
|
|
42
|
|
48
|
|
48
|
Interest
expense
|
|
(186)
|
|
(203)
|
|
(241)
|
|
(630)
|
Income before
income taxes
|
|
1,711
|
|
1,938
|
|
2,076
|
|
5,725
|
Income
taxes
|
|
(401)
|
|
(429)
|
|
(483)
|
|
(1,313)
|
Net
Income
|
$
|
1,310
|
$
|
1,509
|
$
|
1,593
|
$
|
4,412
|
|
|
|
|
|
|
|
|
|
Share and
Per Share
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
|
1.69
|
$
|
1.98
|
$
|
2.16
|
$
|
5.82
|
Earnings per share -
diluted
|
$
|
1.68
|
$
|
1.98
|
$
|
2.15
|
$
|
5.79
|
Weighted average
number of shares - basic
|
|
776.4
|
|
760.5
|
|
737.4
|
|
758.1
|
Weighted average
number of shares - diluted
|
|
779.6
|
|
763.7
|
|
740.9
|
|
761.4
|
Dividends declared per
share
|
$
|
0.73
|
$
|
0.73
|
$
|
0.80
|
$
|
2.26
|
|
|
|
|
|
|
|
|
|
Operating
Ratio
|
|
64.6%
|
|
63.0%
|
|
61.7%
|
|
63.1%
|
Effective
Tax Rate
|
|
23.4%
|
|
22.1%
|
|
23.3%
|
|
22.9%
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Freight Revenues
Statistics (unaudited)
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
Year-to-Date
|
Freight
Revenues (Millions)
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
1,098
|
$
|
1,114
|
$
|
1,133
|
$
|
3,345
|
Energy
|
|
1,173
|
|
1,111
|
|
1,214
|
|
3,498
|
Industrial
|
|
1,340
|
|
1,437
|
|
1,497
|
|
4,274
|
Premium
|
|
1,511
|
|
1,655
|
|
1,714
|
|
4,880
|
Total
|
$
|
5,122
|
$
|
5,317
|
$
|
5,558
|
$
|
15,997
|
Revenue
Carloads (Thousands)
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
|
279
|
|
285
|
|
285
|
|
849
|
Energy
|
|
419
|
|
387
|
|
440
|
|
1,246
|
Industrial
|
|
411
|
|
452
|
|
458
|
|
1,321
|
Premium
[a]
|
|
1,016
|
|
1,101
|
|
1,133
|
|
3,250
|
Total
|
|
2,125
|
|
2,225
|
|
2,316
|
|
6,666
|
Average
Revenue per Car
|
|
|
|
|
|
|
|
|
Agricultural
Products
|
$
|
3,942
|
$
|
3,903
|
$
|
3,973
|
$
|
3,939
|
Energy
|
|
2,799
|
|
2,874
|
|
2,757
|
|
2,807
|
Industrial
|
|
3,262
|
|
3,178
|
|
3,269
|
|
3,236
|
Premium
|
|
1,487
|
|
1,503
|
|
1,513
|
|
1,501
|
Average
|
$
|
2,411
|
$
|
2,389
|
$
|
2,399
|
$
|
2,400
|
|
[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
|
Sep.
30,
|
Dec.
31,
|
for the Trailing
Twelve Months Ended [a]
|
2018
|
2017
|
Net
income
|
$
|
11,690
|
$
|
10,712
|
Less:
|
|
|
|
|
Other
income
|
|
81
|
|
245
|
Add:
|
|
|
|
|
Income tax
expense/(benefit)
|
|
(3,873)
|
|
(3,080)
|
Depreciation
|
|
2,168
|
|
2,105
|
Interest
expense
|
|
818
|
|
719
|
EBITDA
|
$
|
10,722
|
$
|
10,211
|
Interest on
present value of operating leases
|
|
85
|
|
98
|
Adjusted EBITDA
(a)
|
$
|
10,807
|
$
|
10,309
|
Debt
|
$
|
22,411
|
$
|
16,944
|
Net present
value of operating leases
|
|
1,929
|
|
2,140
|
Unfunded
pension and OPEB, net of taxes of $137 and $238
|
|
452
|
|
396
|
Adjusted debt
(b)
|
$
|
24,792
|
$
|
19,480
|
Adjusted debt /
Adjusted EBITDA (b/a)
|
|
2.3
|
|
1.9
|
|
|
[a]
|
The trailing twelve
months income statement information ended September 30, 2018 is
recalculated by taking the twelve months ended December 31, 2017,
subtracting the nine months ended September 30, 2017, and adding
the nine months ended September 30, 2018.
|
|
|
*
|
Total debt plus net
present value of operating leases plus after-tax unfunded pension
and OPEB obligation divided by net income less income tax benefit
and other income plus depreciation, interest expense, and interest
on present value of operating leases. Operating leases were
discounted using 4.4% at September 30, 2018, and 4.6% at December
31, 2017. Adjusted debt to adjusted EBITDA (earnings before
interest, taxes, depreciation, amortization, and interest on
present value of operating leases) is considered a non-GAAP
financial measure by SEC Regulation G and Item 10 of SEC Regulation
S-K and may not be defined and calculated by other companies in the
same manner. We believe this measure is important to management and
investors in evaluating the Company's ability to sustain given debt
levels (including leases) with the cash generated from operations.
In addition, a comparable measure is used by rating agencies when
reviewing the Company's credit rating. Adjusted debt to Adjusted
EBITDA should be considered in addition to, rather than as a
substitute for, net income. The table above provides
reconciliations from net income to adjusted debt to adjusted
EBITDA.
|
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SOURCE Union Pacific Corporation