Union Pacific Corporation · NYSE:UNP
Union Pacific — Q4 2020 Earnings Presentation
13 slides from Union Pacific's earnings presentation, Jan 21, 2021
Slide 1: Fourth Quarter 2020 Earnings Release
FOURTH QUARTER 2020 EARNINGS RELEASE Lance Fritz – Chairman, President & CEO January 21, 2021 Fourth Quarter 2020 Results Earnings Per Share Operating Ratio $2.36 61.0% All-Time 17% 59.7% $2.05 Quarterly $2.02 1.3 pts Record 1% 55.6% (4.1) pts 2019 2020 2020 2019 2020 2020 Reported Adjusted* Reporte
Slide 2: Operations Review: Key Performance Metrics
FOURTH QUARTER 2020 OPERATIONS REVIEW Eric Gehringer Executive Vice President – Operating 3 Key Performance Metrics Fourth Quarter 2020 vs. Fourth Quarter 2019 All-Time All-Time Quarterly Quarterly Record Record 223 22.4 26.1 142 1,032 83 74 FREIGHT CAR FREIGHT CAR TRAIN SPEED LOCOMOTIVE WORKFORCE I
Slide 3: Network Changes; Strengthening the Franchise (2021 Capital Plan)
Network Changes Train Length • Driving Record Train Length (Max on Route, in Feet) – Completed Thirty-Six 15,000 Foot 9,500 Sidings 9,000 – Evolving Transportation Plan ~2,100 ft +30% 8,500 • Network Changes – Englewood Bowl Tracks 8,000 – Intermodal Service to “Pop Up” 7,500 Intermodal Ramp in Twin
Slide 4: Operating Outlook; Marketing & Sales Review
Operating Outlook • Safety First • Focus on Asset Utilization and Terminal Efficiency • Drive Productivity Initiatives • Deliver a Highly Consistent and Reliable Service Product 7 FOURTH QUARTER 2020 MARKETING & SALES REVIEW Kenny Rocker Executive Vice President – Marketing & Sales 8
Slide 5: Bulk and Industrial
Bulk Revenue $1,562M (+1%) Volume 498K (Flat) ARC $3,139 (+1%) Coal & Grain & Fertilizer Food & Renewables Grain Products Refrigerated 226 216 190 180 20% (16%) 45 44 45 48 (2%) 7% 2019 2020 2019 2020 2019 2020 2019 2020 Quarterly Drivers Continued Coal Challenges Strong Export Grain Increased Bever
Slide 6: Premium; Economic Outlook
Premium Revenue $1,580M (+5%) Volume 1,055K (+9%) ARC $1,497 (-4%) Automotive Intermodal 853 759 12% 208 202 (3%) 2019 2020 2019 2020 Quarterly Drivers Automotive Manufacturing Strong Retail Spending & E-Commerce Strength Recovery & Restocking Inventory Restocking 11 Volume in thousands of carloads.
Slide 7: 2021 Volume Outlook; Financial Review
2021 Volume Outlook Bulk Industrial Premium Coal Energy Markets Auto Sales Grain Industrial Production Domestic Intermodal Biofuels Plastics Network Expansion 13 FOURTH QUARTER 2020 FINANCIAL REVIEW Jennifer Hamann Executive Vice President & Chief Financial Officer 14
Slide 8: Fourth Quarter Adjusted Income Statement; Freight Revenue
Fourth Quarter Adjusted Income Statement $ in Millions (except EPS) 2020 2020 Variance 2019 To 2020 Reported Adjusted* Adjusted Operating Revenues $5,141- $5,141- $5,212- (1)--- % Operating Expenses 3,135- 2,857- 3,112- (8)--- Operating Income 2,006- 2,284- 2,100- 9---- Other Income 66- 66- 564 18--
Slide 9: Fourth Quarter Adjusted Operating Expenses; Productivity Results
Fourth Quarter Adjusted Operating Expenses $ in Millions (8%) $3,112 $2,857 $28 $180 $39 $10 $2 $4 (3%) (35%) (7%) (4%) Flat 2% Compensation Fuel Purchased Equipment Depreciation Other* & Benefits Services & & Other Materials Rents 2019 2020* 17 * 2020 Adjusted excludes Brazos non-cash impairment ch
Slide 10: Full Year Results; Cash Generation & Shareholder Returns
Full Year Results Revenue Operating Expenses ($ in millions) ($ in millions) 2020 Highlights $21,708 $19,533 $13,154 • Total Revenue of $19.5 $11,699 Billion, Down 10% on 7% Less Volume $11,421 2019 2020 2019 2020 • Adjusted Operating Income Down 5% to $8.1 Billion Operating Ratio Earnings Per Share
Slide 11: Balance Sheet Strength; A Look Ahead to 2021
Balance Sheet Strength Adjusted Debt ($ in millions) Full Year 2020 $27,433 $28,970 $25,118 -2% • Comparable Adjusted Debt / $19,480 2.8 $17,878 2.5 EBITDA of 2.8x 2.3 1.9 1.9 • Adjusted Debt Increased 2016 2017 2018 2019 2020* $1.5 Billion since Adjusted Debt / EBITDA Year-End 2019 ROIC 15.0% 14.3%
Slide 12: Looking Ahead
FOURTH QUARTER 2020 Lance Fritz Chairman, President & CEO 23 Looking Ahead • Commitment to Safety • Operational Excellence • Deliver a Highly Consistent and Reliable Service Product • Win with Customers • Provide Value to All Stakeholders 24
Slide 13: 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