Summary
Union Pacific Corporation (UNP) reported total operating revenues of $19.9 billion for the year ended December 30, 2016, a decrease of 9% from the prior year, primarily driven by a 7% decline in carloads and lower fuel surcharge revenue, partially offset by core pricing gains. Despite the volume decline, the company achieved its third-best earnings performance, with net income of $4.2 billion, or $5.07 per diluted share. The company maintained a strong focus on safety, achieving its best-ever reportable personal injury incidents rate. Operations saw improved metrics like increased average train speed and decreased terminal dwell time, partly due to lower volumes. Financially, UNP generated substantial operating cash flow of $7.5 billion, resulting in $2.3 billion in free cash flow after investments and dividends. The company continued its commitment to returning capital to shareholders through dividends and share repurchases, repurchasing approximately $3.1 billion worth of shares in 2016. Looking ahead to 2017, UNP anticipates modest volume growth and continued margin improvement driven by pricing, productivity, and operational leverage. Key investments will include approximately $3.1 billion in capital expenditures, with a significant portion allocated to Positive Train Control (PTC) and infrastructure improvements.
Financial Highlights
48 data points| Revenue | $19.94B |
| Operating Expenses | $12.70B |
| Operating Income | $7.24B |
| Interest Expense | $698.00M |
| Net Income | $4.23B |
| EPS (Basic) | $5.09 |
| EPS (Diluted) | $5.07 |
| Shares Outstanding (Basic) | 832.40M |
| Shares Outstanding (Diluted) | 835.40M |
Key Highlights
- 1In 2016, Union Pacific's freight revenue decreased 9% to $18.6 billion due to a 7% drop in carloads and lower fuel surcharge revenue, though core pricing gains provided some offset.
- 2Despite lower volumes, net income remained strong at $4.2 billion ($5.07 per diluted share), marking the third-best earnings performance in the company's history.
- 3The company achieved its best-ever reportable personal injury incidents rate (0.75 per 200,000 employee-hours) and improved key operational metrics like average train speed and terminal dwell time.
- 4Union Pacific generated $7.5 billion in cash from operating activities, resulting in $2.3 billion in free cash flow after accounting for capital expenditures and dividend payments.
- 5The company returned significant capital to shareholders in 2016, with $2.26 per share in dividends declared and approximately $3.1 billion in share repurchases.
- 6Capital expenditures for 2017 are planned at approximately $3.1 billion, with a focus on infrastructure renewal, network capacity, and Positive Train Control (PTC) implementation.