Union Pacific Corporation · NYSE:UNP
Union Pacific — Q2 2020 Earnings Presentation
12 slides from Union Pacific's earnings presentation, Jul 23, 2020
Slide 1: Second Quarter 2020 Earnings Release
SECOND QUARTER 2020 EARNINGS RELEASE Lance Fritz – Chairman, President & CEO July 23, 2020 Second Quarter 2020 Results Earnings Per Share Operating Ratio $2.22 $1.67 61.0 59.6 -25% +1.4 pts 2019 2020 2019 2020 2
Slide 2: Operations Review: Key Performance Metrics
SECOND QUARTER 2020 OPERATIONS REVIEW Jim Vena Chief Operating Officer 3 Unified Plan 2020 Key Performance Metrics – 2Q 2020 vs. 2Q 2019 225 21.6 26.9 136 868 82 76 FREIGHT CAR FREIGHT CAR TRAIN SPEED* LOCOMOTIVE WORKFORCE INTERMODAL MANIFEST/AUTO VELOCITY * TERMINAL (Miles Per Hour) PRODUCTIVITY PR
Slide 3: Unified Plan 2020 Update and Operating Outlook
Unified Plan 2020 Update Terminal Rationalization & Network Changes Train Length (Max on Route, in Feet) • Completed Sixteen 15,000 Foot Sidings • Redesigning Yard and Local 8,500 Transportation Plan ~1,600 ft +23% • Intermodal Network Changes 8,000 – Chicago Global 3 7,500 – Houston Settegast 7,000
Slide 4: Marketing & Sales Review: Bulk
SECOND QUARTER 2020 MARKETING & SALES REVIEW Kenny Rocker Executive Vice President – Marketing & Sales 7 Bulk Revenue $1,386M (-17%) Volume 447K (-15%) ARC $3,099 (-3%) Coal & Grain & Fertilizer Food & Renewables Grain Products Refrigerated 244 186 178 167 -24% -6% 54 53 52 41 -2% -21% 2019 2020 201
Slide 5: Industrial and Premium Results
Industrial Revenue $1,500M (-23%) Volume 468K (-18%) ARC $3,201 (-6%) Energy & Forest Products Industrial Metals & Specialized Chemicals & Minerals Plastics 199 156 157 162 141 115 -19% -10% -26% 56 50 -11% 2019 2020 2019 2020 2019 2020 2019 2020 Quarterly Drivers Reduced Sand, Petroleum, & Economic
Slide 6: Third Quarter Volume & Outlook; Financial Review
Third Quarter Volume & Outlook Third Quarter Volume To Date* 7-Day Weekly Carloadings (000s) Premium +2% 180 2019 Bulk -13% 160 Industrial -16% 140 2020 TOTAL -7% 120 100 January December 11 * Volume through July 21 SECOND QUARTER 2020 FINANCIAL REVIEW Jennifer Hamann Executive Vice President & Chie
Slide 7: Second Quarter Operating Ratio, EPS and Income Statement
Second Quarter Operating Ratio and EPS Favorable / (Unfavorable) Operating Ratio EPS Second Quarter 2019 59.6% $2.22 2019 Weather / Insurance Recovery 0.9 pts $0.05 2019 Payroll Tax Refund (0.7) pts ($0.04) Fuel Price Impact 2.7 pts $0.09 Core Results (4.3) pts ($0.72) Illinois Tollway Real Estate S
Slide 8: Second Quarter Freight Revenue and Operating Expenses
Second Quarter Freight Revenue $ in Millions -24% $5,236 $3,972 Volume Mix/Price Fuel Surcharge (19.50%) (2.25%) (2.25%) 2019 2020 15 Second Quarter Operating Expenses $ in Millions -22% $3,336 $240 $313 $2,590 (21%) $132 (56%) $49 $0 $12 (23%) (19%) Flat (5%) Compensation Fuel Purchased Equipment D
Slide 9: Productivity Results; Cash Generation & Liquidity
Productivity Results Net Productivity of $185 Million Productivity Trend ($ in millions) Car Velocity & $35 Inventory $405 $360 Train Length $75 $230 Locomotive $30 Efficiency 1st Half 2nd Half Workforce & 2019 2020 $45 Other Productivity 17 Cash Generation & Liquidity 1st Half Year-to-Date Cash Fro
Slide 10: Updated 2020 Guidance
Updated 2020 Guidance • Volume Down 10% or so for Full Year 2020 Full Year • Productivity Exceeding $500 Million Operating Ratio Improvement • Pricing Gains in Excess of Inflation Dollars • Strong Cash Generation and Cash Conversion Expected – Capital Spend of ~$2.9 Billion – Maintain Dividend 19 SE
Slide 11: Looking Ahead; Cautionary Information
Looking Ahead • Committed to Employee Safety & Health • Deliver a Highly Consistent and Reliable Service Product • Strong Balance Sheet & Liquidity • Continued Unified Plan 2020 Implementation 21 Cautionary Information This presentation and related materials contain statements about the Company’s fu
Slide 12: Question & Answer Session
Question & Answer Session 23