Union Pacific Corporation · NYSE:UNP
Union Pacific — Q2 2023 Earnings Presentation
12 slides from Union Pacific's earnings presentation, Jul 26, 2023
Slide 1: Second Quarter 2023 Earnings Release
SECOND QUARTER 2023 EARNINGS RELEASE Lance Fritz, Chairman, President, & CEO July 26, 2023 Second Quarter 2023 Results Earnings Per Share Operating Ratio 63.0% $2.93 $2.57 60.2% 2.8 pts vs 2022 (12%) vs 2022 2Q 2022 2Q 2023 2Q 2022 2Q 2023 Key Themes Soft Demand Environment Inflationary Pressures On
Slide 2: Marketing & Sales Review: Bulk
SECOND QUARTER 2023 MARKETING & SALES REVIEW Kenny Rocker Executive Vice President – Marketing & Sales 3 SECOND QUARTER 2023 Bulk Revenue $1,757 (-3%) Volume 492K (-1%) ARC $3,568 (-2%) Major Markets Grain & Fertilizer Food & Coal & Grain Products Refrigerated Renewables 195 197 202 203 +1% Flat 53
Slide 3: Industrial and Premium
SECOND QUARTER 2023 Industrial Revenue $2,086 (Flat) Volume 573K (+1%) ARC $3,646 (-1%) Major Markets Industrial Chemicals Metals & Forest Energy & & Plastics Minerals Products Specialized 205 210 161 164 +2% 141 144 +2% +2% 63 55 -13% 2Q 2022 2Q 2023 2Q 2022 2Q 2023 2Q 2022 2Q 2023 2Q 2022 2Q 2023
Slide 4: Second Half 2023 Volume Outlook
Second Half 2023 Volume Outlook Bulk Industrial Premium Coal Industrial Production Domestic Intermodal Grain Forest Products International Intermodal Biofuels Metals Automotive Construction Current 2023 Full Year Industrial Production Forecast: +0.1% 7 SECOND QUARTER 2023 OPERATIONS REVIEW Eric Gehr
Slide 5: Continued Safety Performance Improvement; Key Performance Metrics
Continued Safety Performance Improvement • Safety of employees, customers and communities we serve is our top priority • Rail is safest way to move freight over land • Technology is further enabling our safety efforts Safety Performance (First Half 2023 vs. First Half 2022) Derailments -9% Good Pers
Slide 6: Key Efficiency Metrics; Historic Agreements Drive Engagement and Productivity
SECOND QUARTER 2023 Key Efficiency Metrics LOCOMOTIVE WORKFORCE TRAIN LENGTH PRODUCTIVITY PRODUCTIVITY (Max on Route, in Feet) (GTMs Per HP Day) (Daily Miles per FTE) 9,439 9,316 1,034 983 126 123 2Q 2022 2Q 2023 2Q 2022 2Q 2023 2Q 2022 2Q 2023 1Q 2023: 123 1Q 2023: 991 1Q 2023: 9,159 Quarterly Driv
Slide 7: Financial Review: Second Quarter Operating Ratio and EPS
SECOND QUARTER 2023 FINANCIAL REVIEW Jennifer Hamann Executive Vice President & Chief Financial Officer 13 Second Quarter Operating Ratio and EPS Favorable / (Unfavorable) Operating Ratio EPS Second Quarter 2022 60.2% $2.93 2023 Brakeperson Buyout Payment (1.1) pts ($0.09) Fuel Price (net) 2.0 pts $
Slide 8: Second Quarter Income Statement
Second Quarter Income Statement 2023 vs. 2023 2022 2022 Operating Revenues $5,963- $6,269- (5)--- % Operating Expenses 3,759- 3,774- -)--- Operating Income 2,204- 2,495- (12)--- Other Income 93- 163- (43)--- Interest Expense (339) (316) 7)--- Income Taxes (389) (507) (23))-- Net Income $1,569- $1,83
Slide 9: Inflation & Labor Increases Offset by Declining Fuel Prices
Inflation & Labor Increases Offset by Declining Fuel Prices Operating Expenses $ in Millions $3,774 $3,759 $177 $18 $20 ($276) $28 $18 16% (29%) 5% 3% 8% 6% Compensation Fuel Purchased Depreciation Equipment Other & Benefits Services & & Other Materials Rents 2Q 2Q 2022 2023 17 Cash Generation & Ret
Slide 10: 2023 Outlook Pressured by Challenging Demand and Cost Environment
2023 Outlook Pressured by Challenging Demand and Cost Environment • Consumer-Related Volumes Likely Drive Full Year Volume Expectations Below Industrial Production • Pricing Dollars in Excess of Inflation Dollars • Forecasting $50 to $70 million in Labor Expense from New Agreements in Second Half of
Slide 11: 2023 Success Drivers
2023 Success Drivers Safety & Right Business, Service Right Price Reliability Rebuild & Invest Wisely; Engage Drive Efficiency 21 Cautionary Information This presentation and related materials contain statements about the Company’s future that are not statements of historical fact, including specifi
Slide 12: Question & Answer Session
QUESTION & ANSWER SESSION