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Union Pacific Reports Fourth Quarter and Full Year 2019 Results

Omaha, Neb., January 23, 2020

Union Pacific Corporation (NYSE: UNP) today reported 2019 fourth quarter net income of $1.4 billion, or $2.02 per diluted share. This compares to $1.6 billion, or $2.12 per diluted share, in the fourth quarter 2018.

"Given the challenging volume environment, we leveraged strong productivity to deliver solid financial results including the third consecutive quarter with an operating ratio below 60 percent," said Lance Fritz, Union Pacific chairman, president and chief executive officer. "The work our employees are doing as part of Unified Plan 2020 has been transformational and key to providing a safe, reliable and consistent service product for our customers."

Fourth Quarter Summary

Operating revenue of $5.2 billion was down 9 percent in fourth quarter 2019, compared to fourth quarter 2018. Fourth quarter business volumes, as measured by total revenue carloads, decreased 11 percent compared to 2018. Industrial volumes were flat compared to 2018, while agricultural products, premium and energy shipments declined. In addition:

  • Quarterly freight revenue declined 10 percent, compared to fourth quarter 2018, as core pricing gains and a positive business mix were offset by lower volumes and decreased fuel surcharge revenue.
  • Union Pacific’s 59.7 percent operating ratio represented a fourth quarter record and the third consecutive quarter below 60 percent, improving 1.9 points compared to fourth quarter 2018.
  • The $2.16 per gallon average quarterly diesel fuel price in fourth quarter 2019 was 7 percent lower than fourth quarter 2018.
  • Quarterly freight car velocity was 220 daily miles per car, a 5 percent improvement compared to fourth quarter 2018.
  • Terminal dwell was 23.3 hours, a 13 percent improvement compared to fourth quarter 2018.
  • The Company repurchased 3.6 million shares in fourth quarter 2019 at an aggregate cost of $599 million.
Summary of Fourth Quarter Freight Revenues
  • Industrial flat
  • Agricultural Products down 2 percent
  • Premium down 14 percent
  • Energy down 25 percent
2019 Full Year Summary

For the full year 2019, Union Pacific reported net income of $5.9 billion or $8.38 per diluted share, which represents a 1 percent decrease and 6 percent increase, respectively, when compared to 2018.

Operating revenue totaled $21.7 billion compared to $22.8 billion in 2018. Operating income totaled $8.6 billion, which was flat compared to 2018. In addition:

  • Freight revenue totaled $20.2 billion, a 5 percent decrease compared to 2018. Carloadings were down 6 percent versus 2018, with growth in industrial volumes more than offset by fewer agricultural products, premium and energy shipments.
  • Union Pacific’s operating ratio improved to a best ever 60.6 percent, 2.1 points lower than 2018.
  • Average diesel fuel prices decreased 7 percent to $2.13 per gallon in 2019 from $2.29 per gallon in 2018.
  • Fuel consumption rate, measured in gallons of fuel per thousand gross ton miles, improved 2% in 2019 compared to 2018.
  • Union Pacific recognized a payroll tax refund of $78.5 million, along with associated interest income of $31.3 million in 2019.
  • Freight car velocity was 208 daily miles per car, a 6 percent improvement compared to full year 2018.
  • Terminal dwell was 24.8 hours, a 17 percent improvement compared to full year 2018.
  • Union Pacific’s reportable personal injury rate of 0.90 incidents per 200,000 employee hours increased 11 percent compared to full year 2018.
  • Union Pacific’s capital program in 2019 totaled $3.2 billion.
  • Union Pacific repurchased 35 million shares in 2019 at an aggregate cost of $5.8 billion.
2020 Outlook

"While we are pleased with our progress in providing a highly consistent, reliable and efficient service product for our customers, we must improve our safety results," Fritz said. "As always, we remain focused on growing the business and improving margins while driving shareholder returns."

Fourth Quarter 2019 Earnings Conference Call

Union Pacific will webcast its fourth quarter 2019 earnings release presentation live at www.badgervision.com/investor and via teleconference on Thursday, January 23, 2020 at 8:45 a.m. Eastern Time. Alternatively, the webcast can be accessed directly through the following link. Participants may join the conference call by dialing 877/407-8293 (or for international participants, 201/689-8349).

About Union Pacific

Union Pacific Railroad is the principal operating company of Union Pacific Corporation (NYSE: UNP). One of America's most recognized companies, Union Pacific Railroad connects 23 states in the western two-thirds of the country by rail, providing a critical link in the global supply chain. The railroad's diversified business mix is classified into its Agricultural Products, Energy, Industrial and Premium business groups. Union Pacific serves many of the fastest-growing U.S. population centers, operates from all major West Coast and Gulf Coast ports to eastern gateways, connects with Canada's rail systems and is the only railroad serving all six major Mexico gateways. Union Pacific provides value to its roughly 10,000 customers by delivering products in a safe, reliable, fuel-efficient and environmentally responsible manner.

Union Pacific Investor contact: Brad Stock at 402-544-4227 or bkstock@up.com

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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 and its ability to improve network performance and customer service. These statements are, or will be, forward-looking statements as defined by the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements also generally include, without limitation, information or statements regarding: projections, predictions, expectations, estimates or forecasts as to the Company’s and its subsidiaries’ business, financial, and operational results, and future economic performance; and management’s beliefs, expectations, goals, and objectives and other similar expressions concerning matters that are not historical facts.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times that, or by which, such performance or results will be achieved. Forward-looking information, including expectations regarding operational and financial improvements and the Company’s future performance or results are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statement. Important factors, including risk factors, could affect the Company’s and its subsidiaries’ future results and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements. Information regarding risk factors and other cautionary information are available in the Company’s Annual Report on Form 10-K for 2018, which was filed with the SEC on February 8, 2019. The Company updates information regarding risk factors if circumstances require such updates in its periodic reports on Form 10-Q and its subsequent Annual Reports on Form 10-K (or such other reports that may be filed with the SEC).

Forward-looking statements speak only as of, and are based only upon information available on, the date the statements were made. The Company assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements. References to our website are provided for convenience and, therefore, information on or available through the website is not, and should not be deemed to be, incorporated by reference herein.

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The statements and information contained in the news releases provided by Union Pacific speak only as of the date issued. Such information by its nature may become outdated, and investors should not assume that the statements and information contained in Union Pacific's news releases remain current after the date issued. Union Pacific makes no commitment, and disclaims any duty, to update any of this information.

Media Contact

Raquel Espinoza
402-544-5034
respinoza@up.com
@RaquelEspinoza