Union Pacific Corporation · NYSE:UNP
Union Pacific — Investor Day (May 2021)
15 slides from Union Pacific's investor day presentation, May 4, 2021
Slide 1: Financial Outlook
FINANCIAL OUTLOOK Jennifer Hamann, EVP and Chief Financial Officer May 4, 2021
Slide 2: Delivering Significant Shareholder Returns
Delivering Significant Shareholder Returns 2018 – 2020 Repurchased Dividends Increased Annual 114 Million Shares $7.5 B Dividend per Share 56% (15% of Average Market Cap) Totaling $17.7 Billion Share Repurchases $17.7 B Returned 145% of Net Income to Shareholders $25.2 Billion Returned to Shareholde
Slide 3: Shareholder Cash Returns Outpacing Peers
Shareholder Cash Returns Outpacing Peers 2018 – 2020 22% High UP Total Return: Solid Share Repurchases Low Combined with Steady Dividend Increases UP Rail Peers 3 Shareholder Cash Returns = Dividends + Share Repurchases / Average Market Capitalization
Slide 4: Improving Margins vs. Rail Peers
Improving Margins vs. Rail Peers 2018 62.7% UP 4th 4 Operating Ratios exclude disclosed non-GAAP items
Slide 5: Improving Margins vs. Rail Peers
Improving Margins vs. Rail Peers 2019 60.6% Change from prior year Better Worse UP 3rd 5 Operating Ratios exclude disclosed non-GAAP items
Slide 6: Improving Margins vs. Rail Peers
Improving Margins vs. Rail Peers 2020 58.5% Change from prior year Better Worse UP 2nd 6 Operating Ratios exclude disclosed non-GAAP items. Union Pacific's results excludes Brazos impairment. See Union Pacific website under Investors for a reconciliation to GAAP.
Slide 7: Clear Path to Industry Leading Operating Ratio
Clear Path to Industry Leading Operating Ratio 62.7% 60.6% 58.5% 56.5 – 57.0% 55.x% 7-Day 174 Volume 163 Industry (000s) ~6% 151 Leading 2018 2019 2020* 2021 2022 2023-2024 PSR * Excludes Brazos impairment. See Union Pacific website under Investors for a reconciliation to GAAP for Union Pacific's re
Slide 8: Driving Growth with Lower Capital Intensity
Driving Growth with Lower Capital Intensity $ in billions $3.1 $3.2 $3.2 $2.8 $2.9 Return-Focused Growth Capital Program % of Revenue 14.7% 14.8% 14.0% 14.5% <15% 2022-2024 Capital Plan: Renewal <15% of Revenue 2017 2018 2019 2020 2021 Outlook 8
Slide 9: Growing Return on Invested Capital
Growing Return on Invested Capital* + 3 pts ~17% 16.2% 15.1% 15.0% Maintaining Strong 14.3% Investment Grade Credit Rating and Delivering Consistent Financial Performance 2014 2018 2019 2020* 2021 2022-2024 Outlook Excludes Brazos impairment 9 * See Union Pacific website under Investors for a reconc
Slide 10: Strong and Growing Cash Generation Supports Shareholder Returns
Strong and Growing Cash Generation Supports Shareholder Returns $ in billions Cash Flow Conversion* $10.5 Cash Returns Share 101% 100% Repurchases $8.4 88% 87% $6.3 $5.8 $3.7 ~$6 $8.2 Dividends $2.3 $2.6 $2.6 2018 2019 2020 2021 2022-2024 2018 2019 2020 2021 2022-2024 Outlook Average Outlook Average
Slide 11: WIN – Industry Leading Financial Results
WIN – Industry Leading Financial Results 2022 – 2024 Revenue Growth Profitability Volume: Exceed Industrial Production, 55.x% Operating Ratio Full Year 2022; ~3% CAGR Industry Leader Core Price Gains Above Inflation $ Mid to High 60% Incremental Margins Low Double Digit EPS Growth CAGR Capital, Leve
Slide 12: Values
VALUES Passion for Performance High Ethical Standards Work as a Team
Slide 13: Appendix
APPENDIX 13
Slide 14: Financial Drivers
Financial Drivers Economic Indicators Industrial Production Housing Starts (millions of units) 6.5% 2.8% 1.40 1.55 10.9% 1.31 Core Assumptions 7.7% (15.5%) Inflation 2.25% (6.7%) 2020 2021 Outlook 2022-2024 Average 2020 2021 Outlook 2022-2024 Average Fuel Price $1.85 per Gallon Light Vehicle Sales C
Slide 15: Carload Growth Trends
Carload Growth Trends Annual Carload Growth Volume CAGR UP UP: (1%) Rail Peers Rail Peers: Flat 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 UP Carload Mix Mix Headwinds Intermodal Growth 42% 50% Coal Decline 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2