01—Abstract
Summary
Summary of the 10-K filed February 4, 2011. Cited figures are marked; the original filing is the authoritative source.
Union Pacific Corporation (UNP) reported a strong recovery and record performance in 2010 following the economic recession.
The company saw significant growth in freight revenues, up 20% to $16.1 billiona, driven by a 13% increase in volume across all commodity groups, particularly automotive, intermodal, and industrial products. This volume growth was supported by core pricing gains and higher fuel surcharges. Financially, UNP achieved a record operating ratio of 70.6% and reported net income of $2.8 billion, or $5.53 per diluted share.
The company also demonstrated a commitment to shareholder returns by increasing its dividend by 41% and repurchasing nearly $1.25 billionb of its stock. Looking ahead, UNP anticipates continued growth, driven by expanding global demand and strategic investments in infrastructure, positioning the company to benefit from increasing freight demand and the shift towards rail transportation.
02—Key points
Key Highlights
- Record operating income of $5.0 billion, a 47% increase from 2009.
- Record operating ratio of 70.6%, an improvement from 76.1% in 2009.
- Freight revenues increased 20% to $16.1 billion, with overall volume up 13%.
- Net income reached $2.8 billion, or $5.53 per diluted share.
- The company increased its quarterly dividend by 41% and repurchased approximately $1.25 billion in shares.
- Customer satisfaction improved, reaching record highs.
- Capital expenditures were $2.5 billion, with $3.2 billion planned for 2011, including $250 million for Positive Train Control (PTC).
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2010filed February 4, 2011Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $16.96B$14.14B | +20.0% |
| Operating Expenses | $11.98B$10.76B | +11.3% |
| Operating Income | $4.98B$3.38B | +47.4% |
| Interest Expense | $602.00M$600.00M | +0.3% |
| Net Income | $2.78B$1.89B | +47.1% |
| EPS (Basic) | $2.79$1.88 | +48.4% |
| EPS (Diluted) | $2.77$1.87 | +47.9% |
| Shares Outstanding (Basic) | 996.40M1.01B | −1.0% |
| Shares Outstanding (Diluted) | 1.01B1.01B | −0.6% |
05—Questions
Frequently Asked Questions
What was Union Pacific's financial performance in 2010 compared to 2009?
In 2010, Union Pacific experienced a significant rebound, with operating income increasing by 47% to $5.0 billion and freight revenues growing by 20% to $16.1 billion. This was driven by a 13% increase in shipment volumes across all commodity groups. The company also achieved a record operating ratio of 70.6% and reported net income of $2.8 billion.
How did Union Pacific return value to shareholders in 2010?
Union Pacific demonstrated a strong commitment to shareholder returns in 2010. The company increased its quarterly dividend by 41% and repurchased approximately $1.25 billion of its common stock. The stock price also saw substantial gains, increasing 45% and outperforming the S&P 500.
What are the key investments Union Pacific is making for the future?
Union Pacific is making strategic investments to support future growth. In 2010, capital expenditures totaled $2.5 billion, and the company planned $3.2 billion for 2011. Key investments include infrastructure improvements, new locomotives and freight cars, technology upgrades, and approximately $250 million allocated for the development and implementation of Positive Train Control (PTC) technology.
What are the main risks facing Union Pacific, as highlighted in the filing?
The company faces several risks, including managing fluctuating demand and network capacity, significant governmental regulation, the transportation of hazardous materials, general economic conditions, competition from other transportation providers, potential labor strikes, severe weather disruptions, reliance on technology, and litigation. Additionally, rising fuel costs and environmental regulations are noted concerns.
06—Continue