Union Pacific Corporation · NYSE:UNP
Union Pacific — Q1 2017 Earnings Presentation
15 slides from Union Pacific's earnings presentation, Apr 27, 2017
Slide 1: First Quarter 2017 Earnings Release
April 27, 2017 First Quarter 2017 Earnings Release Lance Fritz Chairman, President & CEO 1 First Quarter 2017 Results Earnings Per Share Operating Ratio First Quarter First Quarter Flat +14% $1.32 65.1 65.1 $1.16 First Quarter Record 2016 2017 2016 2017 2
Slide 2: First Quarter 2017 Recap
April 27, 2017 First Quarter 2017 Marketing & Sales Review Beth Whited Executive VP & Chief Marketing Officer 3 First Quarter 2017 Recap Volume Growth 7-Day Monthly Carloadings (000s) Coal +16% 210 Agricultural Products +6% 2006 @192 190 2014 @188 Industrial Products +1% 170 2015 @177 Intermodal Fla
Slide 3: Agricultural Products and Automotive
Agricultural Products Revenue $942M (+7%) Volume 250K (+6%) ARC $3,773 (+1%) Grain* Grain Food & Products* Refrigerated* +19% 103.9 Volume Mix 87.4 Flat 77.8 77.8 -3% 53.0 51.4 Food & Refrigerated 21% Grain 48% 2016 2017 2016 2017 2016 2017 Grain Products 31% Quarterly Drivers • Strong Grain Exports
Slide 4: Chemicals and Coal
Chemicals Revenue $885M (+1%) Volume 257K (-4%) ARC $3,448 (+5%) Petroleum & LPG* Plastics* Volume Mix +3% -23% 23% 62 5 62.5 64 3 64.3 58.3 Petrol. 45.1 & LP Gas 17% Fertilizer Soda Ash 16% 12% Soda Ash 12% Industrial Plastics 2016 2017 2016 2017 25% Chemicals 30% Quarterly Drivers • Continued Crud
Slide 5: Industrial Products and Intermodal
Industrial Products Revenue $907M (+9%) Volume 278K (+1%) ARC $3,261 (+7%) Minerals* Construction* Specialized Markets* 98.9 -9% Volume Mix 89 6 89.6 +32% 63.8 Other Lumber 48.2 Minerals 11% Paper -4% 7% 28.0 9% 26.9 Frac Sand* 16% 2016 2017 2016 2017 2016 2017 Specialized Markets Construction 10% 3
Slide 6: 2017 Volume Outlook
2017 Volume Outlook Agricultural Products Coal ? Grain + Favorable Comps + Food and Refrigerated ? Price of Natural Gas Automotive Industrial Products ? Consumer Demand + Frac Sand + Parts Growth ? U.S. Dollar Strength Chemicals Intermodal + Plastics ? International Intermodal - Crude Oil Declines +
Slide 7: Safety and Network Performance
Safety Employee Rail Equipment (Reportable Personal Injury Incidents Per (Reportable Derailment Incidents 200,000 Employee-Hours) Per Million Train Miles*) Good Good 1.12 1.10 +11% +19% 2 95 2.95 3.18 0.85 0.89 2.86 0.75 2.65 2.32 First Qtr Record 1Q13 1Q14 1Q15 1Q16 1Q17 1Q13 1Q14 1Q15 1Q16 1Q17 Pu
Slide 8: Volume & Performance Drive Resources; Operating Outlook
Volume & Performance Drive Resources Total TE&Y Active Locomotive (Full-Time Equivalent) Fleet -1% +3% 14,141 6,774 14,015 6,590 1Q16 1Q17 1Q16 1Q17 Train Size Performance • Balanced Resource Base ((vs 1Q16)) G d Good • TE&Y Furloughs F l h ^: ~1,650 1 650 Auto* +4% Intermodal** +3% • Stored Locomot
Slide 9: First Quarter Income Statement
April 27, 2017 First Quarter 2017 Financial Review Rob Knight Executive VP & Chief Financial Officer 17 First Quarter Income Statement $ in Millions (except EPS) 2017 2016 % Operating Revenues $5,132 $4,829 6 O Operating ti Expenses E 3 339 3,339 3 142 3,142 6 Operating Income 1,793 1,687 6 Other In
Slide 10: Freight Revenue and Operating Expenses
Freight Revenue First Quarter ($ In Millions) +6.5% $4,794 $4,502 +1.0% +1.0% +2.5% +2.0% Volume Fuel Mix Core Surcharge Price 2016 2017 19 First Quarter Operating Expenses $ In Millions Compensation & Fuel Benefits +4% +44% $1,257 $460 $1,213 $320 2016 2017 2016 2017 Purchased Services & • Inflatio
Slide 11: Operating Expenses (cont); Cash Flow & Debt
First Quarter Operating Expenses (cont) $ In Millions Depreciation Equipment & Other Rents +4% $520 $502 -4% 4% $289 $276 2016 2017 2016 2017 Other Expenses • Higher g Depreciable p Base +4% $249 $260 • Lower Locomotive Lease Expense 2016 2017 21 Cash Flow & Debt $ In Millions Cash From Operations -
Slide 12: Delivering Value to Shareholders; Productivity Update
Delivering Value to Shareholders $ In Millions Dividends Share Repurchases • Four Year, 120 Million Share $802 $465 $492 $713 Repurchase Program Beginning January 1, 2017 • Repurchased 7.5 Million 2016 2017 2016 2017 Shares Totaling $802 Million in 2017 Cash Returned to Shareholders ($ In Billions)
Slide 13: 2017 Outlook
2017 Outlook Full Year Operating Ratio • Low Single Digit Volume Growth 4Q14: $438 (%) 63.5 • Price Above Inflation 60 +/- • Productivity $350 to $400 Million • Improved Operating Ratio 2016 2019 Target Continued Focus on G55+0 25 April 27, 2017 First Quarter 2017 Earnings Release Lance Fritz Chairm
Slide 14: Looking Ahead; Cautionary Information
Looking Ahead • Solid First Quarter Results • Continued Focus on Pricing & Productivity • Gradual Improvement in the Economy • Value Tracks Have us Well Positioned 27 Cautionary Information This presentation and related materials contain statements about the Company’s future that are not statements
Slide 15: Question & Answer Session
April 27, 2017 First Quarter 2017 Earnings Release Question & Answer Session 29