Union Pacific Corporation · NYSE:UNP
Union Pacific — Q4 2021 Earnings Presentation
13 slides from Union Pacific's earnings presentation, Jan 20, 2022
Slide 1: Fourth Quarter 2021 Earnings Release
FOURTH QUARTER 2021 EARNINGS RELEASE Lance Fritz, Chairman, President, & CEO January 20, 2022 Fourth Quarter 2021 Results Earnings Per Share Operating Ratio $2.66 59.7% $2.36 57.4% $2.02 13% 55.6% vs 2020* 1.8 pts vs 2020* 32% (2.3 pts) vs 2019 vs 2019 4Q 2019 4Q 2020 4Q 2021 4Q 2019 4Q 2020 4Q 2021
Slide 2: Marketing & Sales Review: Bulk
FOURTH QUARTER 2021 MARKETING & SALES REVIEW Kenny Rocker Executive Vice President – Marketing & Sales 3 FOURTH QUARTER 2021 Bulk Revenue $1,809 (+16%) Volume 524K (+5%) ARC $3,457 (+10%) Major Markets Coal & Renewables Grain & Fertilizer Food & Grain Products Refrigerated 215 216 213 190 +13% -1% 4
Slide 3: Industrial and Premium
FOURTH QUARTER 2021 Industrial Revenue $1,897 (+14%) Volume 538K (+8%) ARC $3,522 (+6%) Major Markets Energy & Specialized Forest Products Industrial Chemicals Metals & Minerals & Plastics 181 148 157 154 137 137 +18% Flat +6% 59 63 +7% 4Q 2020 4Q 2021 4Q 2020 4Q 2021 4Q 2020 4Q 2021 4Q 2020 4Q 2021
Slide 4: Economic Outlook and 2022 Volume Outlook
Economic Outlook Industrial Production Housing Starts Annual Millions Growth (7.2%) +5.6% +4.8% 1.40, +8.1% 1.59, +13.6% 1.48, (7.0%) of Units 14.7% 46.3% 5.6% 5.0% 5.8% 4.9% 4.8% 3.8% 24.1% 11.4% 12.1% 7.7% 8.4% (2.9%) (1.6%) 1.6% (4.3%) (6.7%) (2.6%) (5.3%) (7.2%) (14.9%) (12.8%) (14.8%) Q1 Q2 Q3
Slide 5: Operations Review: Key Performance Metrics
FOURTH QUARTER 2021 OPERATIONS REVIEW Eric Gehringer Executive Vice President – Operating 9 FOURTH QUARTER 2021 Key Performance Metrics FREIGHT CAR VELOCITY INTERMODAL TRIP PLAN MANIFEST/AUTO (Daily Miles per Car) COMPLIANCE TRIP PLAN COMPLIANCE (% of Boxes On Time) (% of Cars On Time) 223 83 78 74
Slide 6: Key Performance Metrics; Investing for Growth
FOURTH QUARTER 2021 Key Performance Metrics LOCOMOTIVE WORKFORCE TRAIN LENGTH PRODUCTIVITY PRODUCTIVITY (Max on Route, in Feet) (GTMs Per HP Day) (Daily Miles per FTE) 9,319 1,046 9,154 1,032 142 129 4Q 2020 4Q 2021 4Q 2020 4Q 2021 4Q 2020 4Q 2021 vs 3Q 2021 +2% vs 3Q 2021 Flat vs 3Q 2021 Flat Quart
Slide 7: Maintaining a Safe and Fluid Rail Network
Maintaining a Safe and Fluid Rail Network Annual Safety Performance • Enhance Safety Programs Employee • Deliver a Highly Consistent and (Reportable Personal Injury Incidents Per 200,000 Employee-Hours) Good Reliable Service Product +9% 0.98 0.90 • Drive Productivity Initiatives • Volume Variable Pl
Slide 8: Fourth Quarter Income Statement
Fourth Quarter Income Statement 2020 2021 vs. 2021 vs. 2021 2019 Adjusted* 2020* 2019 Operating Revenues $5,733- $5,141- 12---- % $5,212- 10)- % Operating Expenses 3,293- 2,857- 15- -- 3,112- 6)- Operating Income 2,440- 2,284- 7---- 2,100- 16-- Other Income 83- 66- 26---- 56- 48)- - Interest Expense
Slide 9: Increased Expenses Driven by Rising Fuel Prices
Increased Expenses Driven by Rising Fuel Prices $ in Millions 15% $3,293 $10 $1 $67 $46 $2,857 $265 $49 5% 80% 9% 5% Flat 29% Compensation Fuel Purchased Equipment Depreciation Other & Benefits Services & & Other Materials Rents 4Q 2020 4Q Adjusted* 2021 17 * 2020 results exclude Brazos non-cash imp
Slide 10: Record Full Year Results; Strong Cash Generation & Returns
Record Full Year Results Revenue Operating Expenses ($ in millions) ($ in millions) 2021 Highlights $21,708 $21,804 $13,154 163K $19,533 157K $12,466 7 Day 7 Day • Total Revenue of $21.8 Carloads 151K Carloads $11,421 Fuel Billion, Up 12% on 4% 7 Day +56% Carloads Fuel -38% Volume Growth 2019 2020 2
Slide 11: Leveraging Strong Balance Sheet; A Look Ahead to 2022
Leveraging Strong Balance Sheet Adjusted Debt ($ in millions) $31,416 $27,433 $28,970 2021 Highlights Adjusted Debt / -2% 2.8 2.7 • Adjusted Debt / EBITDA of 2.5 EBITDA 2.7x* 2019 2020 2021 • Adjusted Debt Increased Adjusted* $2.4 Billion since ROIC Year-End 2020 16.4% 15.0% 14.3% • 2021 Record ROIC
Slide 12: 2022 Success Drivers
FOURTH QUARTER 2021 Lance Fritz Chairman, President & CEO 23 2022 Success Drivers Enhance Safety Programs Advance Customer Experience Operational Excellence Expand Reach to Service New Markets and Industries Provide Value to All Win with Customers Stakeholders Industry Leading Cash ESG Leader Return
Slide 13: 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