10-KPeriod: FY2013

UNION PACIFIC CORP Annual Report, Year Ended Dec 31, 2013

Filed February 7, 2014For Securities:UNP

Summary

Union Pacific Corporation (UNP) demonstrated strong financial performance in 2013, achieving record earnings per share of $9.42 and an all-time best operating ratio of 66.1%. This was driven by core pricing gains and ongoing efficiency improvements across its diversified freight business, which includes Agricultural Products, Automotive, Chemicals, Coal, Industrial Products, and Intermodal. Despite headwinds in the coal market and drought impacts on grain shipments, growth in automotive, chemicals, and industrial products, along with shale-related movements and domestic intermodal traffic, compensated for the declines. The company returned significant value to shareholders through a 19% increase in dividends and a 50% increase in share repurchases compared to 2012. UNP also invested $3.6 billion in its network to enhance safety and reliability, including progress on the federally mandated Positive Train Control (PTC) program. Looking ahead, Union Pacific anticipates continued growth opportunities driven by population increases, resurgent chemical industries, and favorable cross-border trade with Mexico, while maintaining a focus on safety and service excellence.

Financial Highlights

48 data points
Beta

Revenue

$21.96B

Net Income

$4.39B

20.0% Net Margin

EPS (Diluted)

$4.71

Total Assets

$49.73B

Cash & Equivalents

$1.43B

Free Cash Flow

$3.33B

Financial Statements
Beta
Revenue$21.96B
Operating Expenses$14.52B
Operating Income$7.45B
Interest Expense$526.00M
Net Income$4.39B
EPS (Basic)$4.74
EPS (Diluted)$4.71
Shares Outstanding (Basic)926.50M
Shares Outstanding (Diluted)931.50M

Key Highlights

  • 1Record earnings per share of $9.42 in 2013.
  • 2Achieved an all-time best operating ratio of 66.1% in 2013.
  • 3Freight revenues grew 5% to $20.7 billion, driven by price increases and favorable business mix shifts, offsetting flat volumes.
  • 4Shareholder returns were strong, with a 19% increase in dividends and a 50% increase in share repurchases year-over-year.
  • 5Invested $3.6 billion in capital expenditures for infrastructure, safety, and growth initiatives, including $419 million towards Positive Train Control (PTC).
  • 6The company is well-positioned to benefit from growth in automotive, chemicals, industrial products, and cross-border trade with Mexico.
  • 7Maintains a strong liquidity position with $1.8 billion in available credit facilities and no outstanding borrowings on its revolving credit facility.

Frequently Asked Questions

Union Pacific reported record earnings per share of $9.42 and achieved its best-ever operating ratio of 66.1% in 2013. Operating income increased by 10% to $7.4 billion, driven by core pricing gains and operational efficiencies.

Five of the six commodity groups experienced revenue growth, with automotive, chemicals, industrial products, and shale-related movements showing strength. Coal and agricultural product volumes declined, but pricing and mix shifts helped offset some of these decreases.

The company invested $3.6 billion in capital expenditures in 2013, focusing on infrastructure replacement, safety enhancements, and growth initiatives, including significant progress on the Positive Train Control (PTC) system. Union Pacific also returned substantial value to shareholders through a 19% increase in dividends and a 50% increase in share repurchases compared to 2012.

Key risks include fluctuating demand for services, transportation of hazardous materials, significant governmental regulation, general economic conditions, competition from other transportation modes, severe weather events, reliance on technology, potential litigation, environmental regulations, climate change impacts, labor disputes, and reliance on key suppliers.