10-KPeriod: FY2021

UNION PACIFIC CORP Annual Report, Year Ended Dec 31, 2021

Filed February 4, 2022For Securities:UNP

Summary

Union Pacific Corporation (UNP) reported a strong financial performance in 2021, with earnings per share increasing by 26% to $9.95 and an operating ratio of 57.2%, marking an all-time record. This improvement was driven by a 4% increase in total volumes, higher fuel surcharge revenue, core pricing gains, and a favorable traffic mix. Despite facing operational challenges such as supply chain disruptions and weather events, the company returned $10.1 billion to shareholders through dividends and share repurchases, demonstrating a commitment to shareholder value. Looking ahead, Union Pacific plans to invest approximately $3.3 billion in capital expenditures for 2022 to enhance infrastructure, support growth, and improve operational efficiency. While acknowledging ongoing economic uncertainties and the lingering impacts of the COVID-19 pandemic, the company remains focused on its 'Serve, Grow, Win, Together' strategy, emphasizing customer-centered operational excellence and sustainable growth.

Financial Highlights

49 data points
Beta

Revenue

$21.80B

Net Income

$6.52B

29.9% Net Margin

EPS (Diluted)

$9.95

Total Assets

$63.52B

Cash & Equivalents

$960.00M

Free Cash Flow

$6.10B

Financial Statements
Beta
Revenue$21.80B
Operating Expenses$12.47B
Operating Income$9.34B
Interest Expense$1.16B
Net Income$6.52B
EPS (Basic)$9.98
EPS (Diluted)$9.95
Shares Outstanding (Basic)653.80M
Shares Outstanding (Diluted)655.40M

Key Highlights

  • 1Record operating ratio of 57.2% in 2021, a 2.7 percentage point improvement from 2020.
  • 2Earnings per diluted share increased 26% to $9.95 in 2021.
  • 3Total freight revenues grew 11% to $20.2 billion, driven by a 4% increase in volume and favorable pricing.
  • 4Returned $10.1 billion to shareholders in 2021 through $2.8 billion in dividends and $7.3 billion in share repurchases.
  • 5Planned capital expenditures of $3.3 billion for 2022, an increase from $3.0 billion in 2021, to support infrastructure and growth.
  • 6Safety performance metrics (personal injury and equipment incident rates) did not meet expectations in 2021, with initiatives underway to improve safety culture and performance.
  • 7The company is actively engaging in ESG initiatives, including releasing its initial Climate Action Plan and setting carbon emission reduction goals.

Frequently Asked Questions

In 2021, Union Pacific achieved record financial results, including a 26% increase in earnings per share to $9.95 and an all-time record operating ratio of 57.2%. Freight revenues increased 11% to $20.2 billion, driven by a 4% volume increase, higher fuel surcharges, and core pricing gains. The company also returned a significant amount to shareholders, totaling $10.1 billion through dividends and share repurchases.

Union Pacific's strategy is centered around 'Serve, Grow, Win, Together.' For 2022, the company plans capital expenditures of approximately $3.3 billion, an increase from $3.0 billion in 2021. These investments will focus on hardening infrastructure, replacing aging assets, improving network safety and resilience, acquiring freight cars, supporting growth projects, modernizing locomotives, and enhancing operational efficiency.

Union Pacific acknowledged that its 2021 safety results did not meet expectations, with increases in both personal injury and equipment incident rates compared to 2020. The company engaged a third-party expert to evaluate its safety programs and plans to implement recommendations for improvement in 2022. These efforts include refining training, improving root-cause analysis, and building a stronger safety culture, with a continued focus on employee well-being and returning every employee home safely.

Union Pacific is committed to ESG principles as part of its 'Building a Sustainable Future 2030' initiative. Key actions in 2021 included releasing its initial Climate Action Plan, aligning with Science Based Targets initiative (SBTi) goals, and committing to Net Zero by 2050. The company also focused on workforce transparency regarding diversity metrics and continues to report progress towards its diversity representation goals.