Union Pacific Corporation · NYSE:UNP

Union Pacific — Q1 2013 Earnings Presentation

17 slides from Union Pacific's earnings presentation, Apr 18, 2013

  1. Slide 1: First Quarter 2013 Record Results

    First Quarter 2013 Earnings Release April 18, 2013 Jack Koraleski, CEO 1 First Quarter 2013 Record Results Earnings Per Share Positives First Quarter • First Quarter Records +13% $2.03 – Operating Revenue 1st Qtr $1.79 Record – Operating Income – Operating Ratio – Earnings $1.29 – Customer Satisfact

  2. Slide 2: Marketing & Sales Review: Customer Satisfaction

    First Quarter 2013 Marketing & Sales Review April 18, 2013 Eric Butler, Executive VP – Marketing & Sales 3 Customer Satisfaction Good 94 94 93 93 93 92 92 Tie – 91 91 All-Time 90 90 Record 89 87 180 180 181 178 175 175 176 174 172 172 171 169 164 93 = Full Year Record 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3

  3. Slide 3: First Quarter 2013 Recap and Coal

    First Quarter 2013 Recap Freight Revenue Mix Volume Growth Intermodal 20% Chemicals +12% Industrial 18% Agricultural 16% Intermodal +4% Coal Autos 19% 10% Chemicals Automotive +2% 17% Industrial Products Flat Freight Revenue Performance (Year-Over-Year Change) Agricultural -9% +6% +3% Coal -19% -2%

  4. Slide 4: Agricultural Products and Automotive

    Agricultural Products Revenue $784M (-9%) Volume 212K (-9%) ARC $3,694 (+1%) Grain* -19% Volume Mix 79.7 64.7 Grain Products 36% 2012 2013 Food & Refrigerated 27% Grain Grain Products* 37% -4% 79.4 76.1 Quarterly Drivers 2012 2013 • Limited Corn Supply in UP Food & Refrigerated* -3% Territory 59.1 5

  5. Slide 5: Chemicals and Industrial Products

    Chemicals Revenue $873M (+14%) Volume 271K (+12%) ARC $3,225 (+1%) Crude Oil* Volume Mix* +107% 45.6 Crude Oil 22.0 Petroleum 17% & LP Gas Fertilizer 15% 2012 2013 14% Soda Ash 11% Plastics Plastics* Industrial 21% Chemicals +3% 22% 57.9 56.0 Quarterly Drivers 2012 2013 • Continued Crude Oil Growth

  6. Slide 6: Intermodal and 2013 Volume Outlook

    Intermodal Revenue $988M (+9%) Volume 810K (+4%) ARC $1,219 (+4%) International* Volume Mix +8% 444.8 413.4 Domestic 45% International 55% 2012 2013 Domestic* Quarterly Drivers Flat 364.3 365.6 • International Growth Driven by Slow Economic Recovery • Highway Conversions 2012 2013 *Volume in thousan

  7. Slide 7: Operations Review: Safety Trends

    First Quarter 2013 Operations Review April 18, 2013 Lance Fritz, Executive VP - Operations 13 Safety Trends Employee Rail Equipment (Reportable Personal Injury Incidents Per (Reportable Derailment Incidents 200,000 Employee-Hours) Per Million Train Miles) Good Good 1.59 3.68 1.45 1.37 3.28 +11% 3.17

  8. Slide 8: Market Shifts and Network Performance

    Market Shifts 1Q 2013 vs. 1Q 2012 Southern Region Volume Growth* • Southern Region 5% volume near 2006 levels, 4% 3% with 14% higher performance level 2011 2012 1Q 2013 • Strong Track Renewal * Reflects 7-day carloadings Program Southern Region Investments* $250+ • Resource Realignment $228 • Proces

  9. Slide 9: Network Productivity and 2013 Operating Outlook

    Network Productivity First Quarter Slow Order Miles Car Utilization (Days) Good 1,057 Good 8.98 +1% 8.95 8.81 8.83 639 1st Qtr -25% Record 451 340 1st Qtr Record 2010 2011 2012 2013 2010 2011 2012 2013 Train Size (Average Units per Train) • Hardening infrastructure and Good 170** reducing service fa

  10. Slide 10: First Quarter Income Statement

    First Quarter 2013 Financial Review April 18, 2013 Rob Knight, CFO 19 First Quarter Income Statement In Millions (except EPS) 2013 2012 % Operating Revenues $5,290 $5,112 3 Operating Expenses 3,657 3,602 2 Operating Income 1,633 1,510 8 Other Income 40 16 F Interest Expense (128) (135) (5) Income Ta

  11. Slide 11: Freight Revenue and Compensation & Benefits Expense

    Freight Revenue First Quarter (In Millions) +3% +4% $4,984 $4,823 -1.5% +0.5% Volume Fuel Core & Mix Surcharge Price 2012 2013 21 Compensation & Benefits Expense First Quarter 2013 $1,216M, Flat Compensation & Benefits (in Millions) $1,211 Flat $1,216 • Lower Volume • Inflation Costs • Traffic Mix &

  12. Slide 12: Fuel Expense and Expense Review

    Fuel Expense First Quarter 2013 $900M, -3% Gross-Ton-Miles (in Millions) -5% • GTMs Decreased 5% 240,484 227,688 driven by lower Coal Volumes – Volume-Related Cost Reductions 2012 2013 – 3% Consumption Average Fuel Price (Per Gallon Consumed) Rate Increase Flat $3.23 $3.23 • Average Diesel Fuel Pric

  13. Slide 13: Expense Review (cont) and Operating Ratio Performance

    First Quarter 2013 Expense Review (cont) In Millions Equipment & Other Rents • Container Costs - New +6% $313 Contract Arrangement $296 • Higher Freight Car Rental Expense • Lower Freight Car & 2012 2013 Locomotive Lease Expense Other +10% $237 • Higher Property Tax Expense $216 • Increased Costs fo

  14. Slide 14: Strong Financial Position and Shareholder Value

    Strong Financial Position Three Month Period Ending March 31 ($ In Millions) Free Cash Flow* • Solid Free Cash Flow of $1,524 $1,404 $401 Million ($830) ($800) ‒ Strong Cash from Ops ($289) ($323) ‒ 12% Cash Dividend 2012 2013 2012 2013 2012 2013 Increase Cash from Investing Dividends Ops • Strong B

  15. Slide 15: 2013 Outlook

    2013 Outlook Second Quarter • Flat Volumes Full Year • Continued Core Pricing Gains & Network Efficiencies • Assuming Continued Economic Growth: – Positive Volume Growth – Record Operating Ratio & Earnings • Increasing Shareholder Returns 29 First Quarter 2013 Earnings Release April 18, 2013 Jack Ko

  16. Slide 16: Positioned for Success; Cautionary Information

    Positioned for Success • Continued Economic Improvement • Growth Opportunities • Business Development • Customer Value • Strategic Investments • Well Positioned for the Future 31 Cautionary Information This press release and related materials contain statements about the Corporation’s future that ar

  17. Slide 17: Question & Answer Session

    First Quarter 2013 Earnings Release April 18, 2013 Question & Answer Session 33

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