Union Pacific Corporation · NYSE:UNP
Union Pacific — Q3 2021 Earnings Presentation
12 slides from Union Pacific's earnings presentation, Oct 21, 2021
Slide 1: Third Quarter 2021 Earnings Release
THIRD QUARTER 2021 EARNINGS RELEASE Lance Fritz – Chairman, President & CEO October 21, 2021 Third Quarter 2021 Results Earnings Per Share Operating Ratio $2.57 59.5% 58.7% $2.22 $2.01 56.3% 28% vs 2020 (2.4 pts) vs 2020 16% vs 2019 (3.2 pts) vs 2019 3Q 2019 3Q 2020 3Q 2021 3Q 2019 3Q 2020 3Q 2021 K
Slide 2: Marketing & Sales Review: Bulk
THIRD QUARTER 2021 MARKETING & SALES REVIEW Kenny Rocker Executive Vice President – Marketing & Sales 3 THIRD QUARTER 2021 Bulk Revenue $1,687 (+14%) Volume 520K (+4%) ARC $3,244 (+9%) Major Markets Coal & Renewables Grain & Fertilizer Food & Grain Products Refrigerated 213 232 187 185 +9% -1% 50 55
Slide 3: Industrial and Premium
THIRD QUARTER 2021 Industrial Revenue $1,911 (+22%) Volume 549K (+14%) ARC $3,482 (+6%) Major Markets Energy & Specialized Forest Products Industrial Chemicals Metals & Minerals & Plastics 188 144 153 156 145 125 +21% +16% +6% 55 63 +15% 3Q 2020 3Q 2021 3Q 2020 3Q 2021 3Q 2020 3Q 2021 3Q 2020 3Q 202
Slide 4: 2021 Volume Outlook
4th Quarter Year over Year 2021 Volume Outlook Grain & Grain Products 7-Day Weekly Carloadings* Bulk +• Food & Refrigerated (000s) +• Coal 175 +• Industrial Production 2021 155 Industrial +• Forest Products 2020 2019 • Energy Markets 135 • Auto Production 115 1Q 2Q 3Q 4Q Premium +• Tight Truck Capac
Slide 5: Key Performance Metrics
THIRD QUARTER 2021 Key Performance Metrics FREIGHT CAR VELOCITY* INTERMODAL TRIP PLAN MANIFEST/AUTO (Daily Miles per Car) COMPLIANCE TRIP PLAN COMPLIANCE (% of Boxes On Time) (% of Cars On Time) 223 Sep 204 77 Sep 73 72 Jul 195 Jul 66 Sep 197 66 Jul 60 61 61 61 186 Aug 57 Aug Aug 3Q 2020 3Q 2021 3Q
Slide 6: Operating Safely and Efficiently to Drive Customer Service
Operating Safely and Efficiently to Drive Customer Service Year to Date Safety Performance • Focus on Safety Employee • Increasing Train Length (Reportable Personal Injury Incidents Per 200,000 Employee-Hours) Good – Completed Nine 15,000’ Sidings +11% 1.00 0.82 0.90 – Begun Construction on 26 More
Slide 7: Financial Review: Strong Core Results Offset Weather and Fuel Headwinds
THIRD QUARTER 2021 FINANCIAL REVIEW Jennifer Hamann Executive Vice President & Chief Financial Officer 13 Strong Core Results Offset Weather and Fuel Headwinds Favorable / (Unfavorable) Operating Ratio EPS Third Quarter 2020 58.7% $2.01 Wildfires and Weather (0.5) pts ($0.05) Fuel Price (1.4) pts $0
Slide 8: Third Quarter Income Statement
Third Quarter Income Statement 2021 vs. 2021 vs. 2021 2020 2019 2020 2019 Operating Revenues $5,566- $4,919- 13---- % $5,516- 1)- % Operating Expenses 3,134- 2,888- 9- -- 3,282- (5)- Operating Income 2,432- 2,031- 20---- 2,234- 9-- Other Income 38- 37- 3---- 53- (28)- - Interest Expense (290) (295)
Slide 9: Increased Expenses Driven by Rising Fuel Prices
Increased Expenses Driven by Rising Fuel Prices $ in Millions 9% $3,134 $0 $2 $29 $2,888 $2 $243 $32 3% 81% Flat Flat Flat (10%) Compensation Fuel Purchased Equipment Depreciation Other & Benefits Services & & Other Materials Rents 3Q 3Q 17 2020 2021 Strong Incremental Margins Drive Improvement 2021
Slide 10: Strong Cash Generation & Returns to Shareholders
Strong Cash Generation & Returns to Shareholders 2021 Year to Date Results Cash From Operations vs. • 95% Cash Flow Conversion Rate* Cash Conversion* ($ in millions) • Returned $7.9 Billion in Cash to Shareholders $6,503 $5,993 – Increased Dividend by 10% – $2.0 Billion Accelerated Share Repurchase
Slide 11: Driving Performance for All Stakeholders
THIRD QUARTER 2021 Lance Fritz Chairman, President & CEO 21 Driving Performance for All Stakeholders • Commitment to Safety • Operational Excellence • Deliver a Highly Consistent and Reliable Service Product • Win with Customers • Provide Value to All Stakeholders 22
Slide 12: Question & Answer Session / Cautionary Information
Cautionary Information 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 im