StockNews.AI
UNP
StockNews.AI
208 days

Union Pacific Reports Fourth Quarter and Full Year 2024 Results

1. UNP reported Q4'24 net income at $1.8 billion, up 7% from Q4'23. 2. 2024 total revenue increased 1% to $24.3 billion driven by volume gains. 3. Operating ratio improved to 58.7%, benefitting from operational efficiencies. 4. Capital expenditures totaled $3.4 billion with a share buyback of $1.5 billion. 5. Future earnings growth estimated at high-single to low-double digit CAGR.

43m saved
Insight
Article

FAQ

Why Bullish?

The strong earnings and improved operating ratios suggest financial strength, akin to positive performance previous quarters, positively influencing investor sentiment.

How important is it?

The article details UNP's quarterly performance, a critical metric influencing stock evaluations and investor decisions.

Why Short Term?

Positive quarterly results typically lead to immediate market reactions. Historical performance shows stocks react swiftly following good earnings announcements.

Related Companies

CSXNSCKSU
OMAHA, Neb.--(BUSINESS WIRE)--Union Pacific Corporation (NYSE: UNP) today reported 2024 fourth quarter net income of $1.8 billion, or $2.91 per diluted share. These results include $40 million of labor expense related to the ratification of a crew staffing agreement. This compares to 2023 fourth quarter net income of $1.7 billion, or $2.71 per diluted share. Reported net income for full year 2024 was $6.7 billion, or $11.09 per diluted share. These full year results compare to full year 2023 net income of $6.4 billion, or $10.45 per diluted share. “Our strong fourth quarter results represent a great capstone to a very successful year for Union Pacific,” said Jim Vena, Union Pacific Chief Executive Officer. “The team has fully embraced our strategy to lead the industry in safety, service, and operational excellence. That commitment has produced industry leading financial results in 2024, punctuated by our strong finish to the year. We will carry this momentum into 2025 as we seek to unlock the full potential of the UP franchise.” Fourth Quarter Summary: 2024 vs. 2023 Financial Results: Strong Service and Efficient Performance Enabled Volume Growth; Fourth Quarter Records for Operating Income and Net Income Operating revenue of $6.1 billion was down 1% driven by lower fuel surcharge revenue, unfavorable business mix, and lower other revenue, partially offset by increased volume and core pricing gains. Revenue carloads were up 5%. Operating ratio was 58.7%, an improvement of 220 basis points. This includes an unfavorable 70 basis point impact from the ratification of a crew staffing agreement. Operating income of $2.5 billion was up 5%. Operating Performance: Improved Network Fluidity Amid Volume Growth; Fourth Quarter Record for Workforce Productivity Quarterly freight car velocity improved 1% to 219 daily miles per car. Quarterly locomotive productivity declined 3% to 136 gross ton-miles (GTMs) per horsepower day. Quarterly workforce productivity increased 6% to 1,118 car miles per employee. Fuel consumption rate improved 1% to 1.078, measured in gallons of fuel per thousand GTMs. Full Year Summary: 2024 vs. 2023 Financial Results: Higher Operating Revenue Driven by Volume and Core Pricing Gains Operating revenue of $24.3 billion was up 1% driven by increased volume and core pricing gains, partially offset by lower fuel surcharge revenue, unfavorable business mix, and lower other revenue. Revenue carloads increased 3%. Operating ratio of 59.9% improved 240 basis points. Operating Income of $9.7 billion was up 7%. Union Pacific’s 2024 capital program totaled $3.4 billion. The company repurchased 6.3 million shares in 2024 at an aggregate cost of $1.5 billion. Operating Performance: Strong Improvement Across Safety, Service, and Operational Excellence; Full Year Record for Workforce Productivity Union Pacific’s reportable personal injury and reportable derailment rates both improved. Freight car velocity improved 2% to 208 daily miles per car. Locomotive productivity improved 5% to 135 GTMs per horsepower day. Workforce productivity improved 6% to 1,062 car miles per employee. Fuel consumption rate improved 1% to 1.082, measured in gallons of fuel per thousand GTMs. 2025 Outlook: On Track with Investor Day Targets Volume impacted by mixed economic backdrop, coal demand, and challenging year-over-year international intermodal comparisons Pricing dollars accretive to operating ratio Earnings per share growth consistent with attaining the 3-year CAGR target of high-single to low-double digit Industry-leading operating ratio and return on invested capital No change to long-term capital allocation strategy Capital plan of $3.4 billion Share repurchases of $4.0 to $4.5 billion Fourth Quarter 2024 Earnings Conference Call Union Pacific will provide a webcast for its fourth quarter 2024 earnings release presentation live at https://investor.unionpacific.com and via teleconference on Thursday, January 23, 2025, at 8:45 a.m. Eastern Time. Participants may join the conference call by dialing 877-407-8293 (or for international participants, 201-689-8349). ABOUT UNION PACIFIC Union Pacific (NYSE: UNP) delivers the goods families and businesses use every day with safe, reliable, and efficient service. Operating in 23 western states, the company connects its customers and communities to the global economy. Trains are the most environmentally responsible way to move freight, helping Union Pacific protect future generations. More information about Union Pacific is available at www.up.com. Supplemental financial information is attached. This news release and related materials contain statements about the Company’s future that are not statements of historical fact, including specifically the statements regarding the potential impacts of public health crises, including pandemics, epidemics and the outbreak of other contagious diseases, such as the coronavirus and its variant strains (COVID); the Russia-Ukraine and Israel-Hamas wars and other geopolitical tensions in the Middle East, and any impacts on our business operations, financial results, liquidity, and financial position, and on the world economy (including customers, employees, and supply chains), including as a result of fluctuations in volume and carloadings; expectations as to general macroeconomic conditions, including slowdowns and recessions, domestically or internationally, and future volatility in interest rates and fuel prices; closing of customer manufacturing, distribution, or production facilities; expectations as to operational or service improvements; expectations as to hiring challenges; availability of employees; expectations regarding the effectiveness of steps taken or to be taken to improve operations, service, infrastructure improvements, and transportation plan modifications (including those in response to increased traffic); expectations as to cost savings, revenue growth, and earnings; the time by which goals, targets, or objectives will be achieved; projections, predictions, expectations, estimates, or forecasts as to business, financial, and operational results, future economic performance, and planned capital investments ; proposed new products and services; estimates of costs relating to environmental remediation and restoration; estimates and expectations regarding tax matters; estimates and expectations regarding potential tariffs; expectations that claims, litigation, environmental costs, commitments, contingent liabilities, labor negotiations or agreements, cyberattacks or other matters. These statements are, or will be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of 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 2023, which was filed with the SEC on February 9, 2024. 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 the Company’s 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. UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Condensed Consolidated Statements of Income (unaudited)   Millions, Except Per Share Amounts and Percentages, For the Periods Ended December 31, 4th Quarter Full Year 2024 2023 % 2024 2023 % Operating Revenues Freight revenues $ 5,789 $ 5,801 - % $ 22,811 $ 22,571 1 % Other revenues 332 358 (7 ) 1,439 1,548 (7 ) Total operating revenues 6,121 6,159 (1 ) 24,250 24,119 1 Operating Expenses Compensation and benefits 1,261 1,169 8 4,899 4,818 2 Purchased services and materials 619 645 (4 ) 2,520 2,616 (4 ) Fuel 581 759 (23 ) 2,474 2,891 (14 ) Depreciation 606 589 3 2,398 2,318 3 Equipment and other rents 248 229 8 920 947 (3 ) Other 281 361 (22 ) 1,326 1,447 (8 ) Total operating expenses 3,596 3,752 (4 ) 14,537 15,037 (3 ) Operating Income 2,525 2,407 5 9,713 9,082 7 Other income, net 68 108 (37 ) 350 491 (29 ) Interest expense (312 ) (331 ) (6 ) (1,269 ) (1,340 ) (5 ) Income before income taxes 2,281 2,184 4 8,794 8,233 7 Income tax expense (519 ) (532 ) (2 ) (2,047 ) (1,854 ) 10 Net Income $ 1,762 $ 1,652 7 % $ 6,747 $ 6,379 6 % Share and Per Share Earnings per share - basic $ 2.92 $ 2.71 8 % $ 11.10 $ 10.47 6 % Earnings per share - diluted $ 2.91 $ 2.71 7 $ 11.09 $ 10.45 6 Weighted average number of shares - basic 604.2 608.9 (1 ) 607.6 609.2 - Weighted average number of shares - diluted 605.2 609.9 (1 ) 608.6 610.2 - Dividends declared per share $ 1.34 $ 1.30 3 $ 5.28 $ 5.20 2 Operating Ratio 58.7 % 60.9 % (2.2) pts 59.9 % 62.3 % (2.4) pts Effective Tax Rate 22.8 % 24.4 % (1.6) pts 23.3 % 22.5 % 0.8 pts UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Freight Revenues Statistics (unaudited)   For the Periods Ended December 31, 4th Quarter Full Year 2024 2023 % 2024 2023 % Freight Revenues (Millions) Grain & grain products $ 1,061 $ 986 8 % $ 3,828 $ 3,644 5 % Fertilizer 199 194 3 811 757 7 Food & refrigerated 253 264 (4 ) 1,085 1,041 4 Coal & renewables 351 494 (29 ) 1,483 1,916 (23 ) Bulk 1,864 1,938 (4 ) 7,207 7,358 (2 ) Industrial chemicals & plastics 582 538 8 2,345 2,176 8 Metals & minerals 507 540 (6 ) 2,081 2,194 (5 ) Forest products 324 335 (3 ) 1,326 1,347 (2 ) Energy & specialized markets 679 665 2 2,688 2,521 7 Industrial 2,092 2,078 1 8,440 8,238 2 Automotive 581 600 (3 ) 2,452 2,421 1 Intermodal 1,252 1,185 6 4,712 4,554 3 Premium 1,833 1,785 3 7,164 6,975 3 Total $ 5,789 $ 5,801 - % $ 22,811 $ 22,571 1 % Revenue Carloads (Thousands) Grain & grain products 234 216 8 % 850 798 7 % Fertilizer 51 47 9 213 191 12 Food & refrigerated 40 42 (5 ) 177 175 1 Coal & renewables 175 217 (19 ) 702 867 (19 ) Bulk 500 522 (4 ) 1,942 2,031 (4 ) Industrial chemicals & plastics 170 161 6 672 645 4 Metals & minerals 179 189 (5 ) 719 793 (9 ) Forest products 52 52 - 213 213 - Energy & specialized markets 154 153 1 607 582 4 Industrial 555 555 - 2,211 2,233 (1 ) Automotive 197 197 - 824 820 - Intermodal [a] 911 782 16 3,357 3,028 11 Premium 1,108 979 13 4,181 3,848 9 Total 2,163 2,056 5 % 8,334 8,112 3 % Average Revenue per Car Grain & grain products $ 4,532 $ 4,580 (1 )% $ 4,505 $ 4,567 (1 )% Fertilizer 3,918 4,085 (4 ) 3,809 3,962 (4 ) Food & refrigerated 6,152 6,174 - 6,104 5,929 3 Coal & renewables 2,012 2,281 (12 ) 2,113 2,211 (4 ) Bulk 3,723 3,712 - 3,710 3,623 2 Industrial chemicals & plastics 3,445 3,353 3 3,493 3,374 4 Metals & minerals 2,820 2,860 (1 ) 2,893 2,765 5 Forest products 6,210 6,326 (2 ) 6,229 6,310 (1 ) Energy & specialized markets 4,412 4,347 1 4,426 4,335 2 Industrial 3,771 3,742 1 3,818 3,689 3 Automotive 2,952 3,061 (4 ) 2,976 2,955 1 Intermodal [a] 1,376 1,515 (9 ) 1,404 1,504 (7 ) Premium 1,656 1,824 (9 ) 1,714 1,813 (5 ) Average $ 2,677 $ 2,822 (5 )% $ 2,737 $ 2,782 (2 )%   [a] For intermodal shipments each container or trailer equals one carload. UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Condensed Consolidated Statements of Financial Position (unaudited)   Millions, Except Percentages Dec. 31, 2024 Dec. 31, 2023 Assets Cash and cash equivalents $ 1,016 $ 1,055 Short-term investments 20 16 Other current assets 2,985 3,077 Investments 2,664 2,605 Properties, net 58,343 57,398 Operating lease assets 1,297 1,643 Other assets 1,390 1,338 Total assets $ 67,715 $ 67,132 Liabilities and Common Shareholders' Equity Debt due within one year $ 1,425 $ 1,423 Other current liabilities 3,829 3,683 Debt due after one year 29,767 31,156 Operating lease liabilities 925 1,245 Deferred income taxes 13,151 13,123 Other long-term liabilities 1,728 1,714 Total liabilities 50,825 52,344 Total common shareholders' equity 16,890 14,788 Total liabilities and common shareholders' equity $ 67,715 $ 67,132 Return on Average Common Shareholders' Equity 42.6 % 47.3 % Return on Invested Capital as Adjusted (ROIC)* 15.8 % 15.5 %   * ROIC is a non-GAAP measure; however, management believes that it is an important measure in evaluating efficiency and effectiveness of our long-term capital investments. See page 9 for a reconciliation to GAAP. UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Condensed Consolidated Statements of Cash Flows (unaudited)   Full Year Millions, for the Periods Ended December 31, 2024 2023 Operating Activities Net income $ 6,747 $ 6,379 Depreciation 2,398 2,318 Deferred and other income taxes 28 117 Other - net 173 (435 ) Cash provided by operating activities 9,346 8,379 Investing Activities Capital investments* (3,452 ) (3,606 ) Other - net 127 (61 ) Cash used in investing activities (3,325 ) (3,667 ) Financing Activities Dividends paid (3,213 ) (3,173 ) Debt repaid (2,226 ) (2,190 ) Share repurchase programs (1,505 ) (705 ) Debt Issued 800 1,599 Other - net 77 (156 ) Cash used in financing activities (6,067 ) (4,625 ) Net change in cash, cash equivalents, and restricted cash (46 ) 87 Cash, cash equivalents, and restricted cash at beginning of year 1,074 987 Cash, cash equivalents, and restricted cash at end of period $ 1,028 $ 1,074 Free Cash Flow** Cash provided by operating activities $ 9,346 $ 8,379 Cash used in investing activities (3,325 ) (3,667 ) Dividends paid (3,213 ) (3,173 ) Free cash flow $ 2,808 $ 1,539   * Capital investments include locomotive and freight car early lease buyouts of $143 million in 2024 and $57 million in 2023. ** Free cash flow is a non-GAAP measure; however, we believe this measure is important to management and investors in evaluating our financial performance and measures our ability to generate cash without additional external financing. UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Operating and Performance Statistics (unaudited)   For the Periods Ended December 31, 4th Quarter Full Year 2024 2023 % 2024 2023 % Operating/Performance Statistics Freight car velocity (daily miles per car)* 219 217 1 % 208 204 2 % Average train speed (miles per hour)* 23.9 24.9 (4 ) 23.6 24.2 (2 ) Average terminal dwell time (hours)* 21.8 22.7 (4 ) 22.6 23.4 (3 ) Locomotive productivity (GTMs per horsepower day) 136 140 (3 ) 135 129 5 Gross ton-miles (GTMs) (millions) 218,558 214,570 2 847,386 837,502 1 Train length (feet) 9,462 9,413 1 9,469 9,356 1 Intermodal service performance index (%) 89 96 (7) pts 90 88 2 pts Manifest service performance index (%) 96 91 5 pts 89 85 4 pts Intermodal car trip plan compliance (%)** 79 85 (6) pts 80 78 2 pts Manifest car trip plan compliance (%)** 73 70 3 pts 68 65 3 pts Workforce productivity (car miles per employee) 1,118 1,051 6 1,062 1,000 6 Total employees (average) 29,789 30,559 (3 ) 30,336 31,490 (4 ) Locomotive Fuel Statistics Average fuel price per gallon consumed $ 2.41 $ 3.16 (24 )% $ 2.64 $ 3.09 (15 )% Fuel consumed in gallons (millions) 236 234 1 917 911 1 Fuel consumption rate*** 1.078 1.091 (1 ) 1.082 1.088 (1 ) Revenue Ton-Miles (Millions) Grain & grain products 23,207 21,166 10 % 84,302 77,717 8 % Fertilizer 3,291 2,960 11 13,204 12,031 10 Food & refrigerated 4,313 4,586 (6 ) 18,547 18,286 1 Coal & renewables 17,126 21,876 (22 ) 72,106 88,604 (19 ) Bulk 47,937 50,588 (5 ) 188,159 196,638 (4 ) Industrial chemicals & plastics 7,457 7,040 6 30,436 28,837 6 Metals & minerals 8,013 8,712 (8 ) 32,793 36,121 (9 ) Forest products 5,369 5,447 (1 ) 21,967 22,447 (2 ) Energy & specialized markets 10,690 10,349 3 41,925 39,286 7 Industrial 31,529 31,548 - 127,121 126,691 - Automotive 4,452 4,369 2 18,425 18,080 2 Intermodal 20,506 18,438 11 76,011 71,890 6 Premium 24,958 22,807 9 94,436 89,970 5 Total 104,424 104,943 - % 409,716 413,299 (1 )%   * Surface Transportation Board (STB) reported performance measures. ** Methodology used to report is not comparable with the reporting to the STB under docket number EP 770. *** Fuel consumption is computed as follows: gallons of fuel consumed divided by gross ton-miles in thousands. UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Condensed Consolidated Statements of Income (unaudited) Millions, Except Per Share Amounts and Percentages, 2024 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year Operating Revenues Freight revenues $ 5,616 $ 5,638 $ 5,768 $ 5,789 $ 22,811 Other revenues 415 369 323 332 1,439 Total operating revenues 6,031 6,007 6,091 6,121 24,250 Operating Expenses Compensation and benefits 1,223 1,187 1,228 1,261 4,899 Purchased services and materials 613 644 644 619 2,520 Fuel 658 625 610 581 2,474 Depreciation 594 596 602 606 2,398 Equipment and other rents 216 219 237 248 920 Other 355 336 354 281 1,326 Total operating expenses 3,659 3,607 3,675 3,596 14,537 Operating Income 2,372 2,400 2,416 2,525 9,713 Other income, net 92 103 87 68 350 Interest expense (324 ) (319 ) (314 ) (312 ) (1,269 ) Income before income taxes 2,140 2,184 2,189 2,281 8,794 Income tax expense (499 ) (511 ) (518 ) (519 ) (2,047 ) Net Income $ 1,641 $ 1,673 $ 1,671 $ 1,762 $ 6,747 Share and Per Share Earnings per share - basic $ 2.69 $ 2.75 $ 2.75 $ 2.92 $ 11.10 Earnings per share - diluted $ 2.69 $ 2.74 $ 2.75 $ 2.91 $ 11.09 Weighted average number of shares - basic 609.2 609.4 607.6 604.2 607.6 Weighted average number of shares - diluted 610.2 610.3 608.6 605.2 608.6 Dividends declared per share $ 1.30 $ 1.30 $ 1.34 $ 1.34 $ 5.28 Operating Ratio 60.7 % 60.0 % 60.3 % 58.7 % 59.9 % Effective Tax Rate 23.3 % 23.4 % 23.7 % 22.8 % 23.3 % UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Freight Revenue Statistics (unaudited)   2024 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year Freight Revenues (Millions) Grain & grain products $ 943 $ 901 $ 923 $ 1,061 $ 3,828 Fertilizer 201 203 208 199 811 Food & refrigerated 285 278 269 253 1,085 Coal & renewables 388 339 405 351 1,483 Bulk 1,817 1,721 1,805 1,864 7,207 Industrial chemicals & plastics 572 593 598 582 2,345 Metals & minerals 515 530 529 507 2,081 Forest products 338 342 322 324 1,326 Energy & specialized markets 679 658 672 679 2,688 Industrial 2,104 2,123 2,121 2,092 8,440 Automotive 611 659 601 581 2,452 Intermodal 1,084 1,135 1,241 1,252 4,712 Premium 1,695 1,794 1,842 1,833 7,164 Total $ 5,616 $ 5,638 $ 5,768 $ 5,789 $ 22,811 Revenue Carloads (Thousands) Grain & grain products 210 200 206 234 850 Fertilizer 47 62 53 51 213 Food & refrigerated 46 46 45 40 177 Coal & renewables 177 158 192 175 702 Bulk 480 466 496 500 1,942 Industrial chemicals & plastics 164 169 169 170 672 Metals & minerals 170 184 186 179 719 Forest products 53 55 53 52 213 Energy & specialized markets 154 147 152 154 607 Industrial 541 555 560 555 2,211 Automotive 207 218 202 197 824 Intermodal [a] 739 798 909 911 3,357 Premium 946 1,016 1,111 1,108 4,181 Total 1,967 2,037 2,167 2,163 8,334 Average Revenue per Car Grain & grain products $ 4,494 $ 4,493 $ 4,498 $ 4,532 $ 4,505 Fertilizer 4,271 3,311 3,872 3,918 3,809 Food & refrigerated 6,231 5,943 6,099 6,152 6,104 Coal & renewables 2,189 2,156 2,101 2,012 2,113 Bulk 3,787 3,692 3,641 3,723 3,710 Industrial chemicals & plastics 3,486 3,507 3,534 3,445 3,493 Metals & minerals 3,030 2,885 2,847 2,820 2,893 Forest products 6,297 6,249 6,157 6,210 6,229 Energy & specialized markets 4,416 4,462 4,415 4,412 4,426 Industrial 3,886 3,825 3,791 3,771 3,818 Automotive 2,947 3,033 2,968 2,952 2,976 Intermodal [a] 1,468 1,421 1,365 1,376 1,404 Premium 1,792 1,766 1,657 1,656 1,714 Average $ 2,855 $ 2,768 $ 2,662 $ 2,677 $ 2,737   [a] For intermodal shipments each container or trailer equals one carload. UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Non-GAAP Measures Reconciliation to GAAP (unaudited)   Debt / Net Income Millions, Except Ratios 2024 2023 Debt $ 31,192 $ 32,579 Net income 6,747 6,379 Debt / net income 4.6 5.1 Adjusted Debt / Adjusted EBITDA* Millions, Except Ratios 2024 2023 Net income $ 6,747 $ 6,379 Add: Income tax expense 2,047 1,854 Depreciation 2,398 2,318 Interest expense 1,269 1,340 EBITDA $ 12,461 $ 11,891 Adjustments: Other income, net (350 ) (491 ) Interest on operating lease liabilities** 48 58 Adjusted EBITDA (a) $ 12,159 $ 11,458 Debt $ 31,192 $ 32,579 Operating lease liabilities 1,271 1,600 Adjusted debt (b) $ 32,463 $ 34,179 Adjusted debt / adjusted EBITDA (b/a) 2.7 3.0   * Adjusted debt (total debt plus operating lease liabilities plus after-tax unfunded pension and OPEB (other post-retirement benefit) obligations) to adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and adjustments for other income and interest on present value of operating leases) is considered a non-GAAP financial measure by SEC Regulation G and Item 10 of SEC Regulation S-K and may not be defined and calculated by other companies in the same manner. We believe this measure is important to management and investors in evaluating the Company’s ability to sustain given debt levels (including leases) with the cash generated from operations. In addition, a comparable measure is used by rating agencies when reviewing the Company’s credit rating. Adjusted debt to adjusted EBITDA should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP. The most comparable GAAP measure is debt to net income ratio. The tables above provide reconciliations from net income to adjusted EBITDA, debt to adjusted debt, and debt to net income to adjusted debt to adjusted EBITDA. At December 31, 2024 and 2023, the incremental borrowing rate on operating leases was 3.8% and 3.6%, respectively. Pension and OPEB were funded at December 31, 2024 and 2023. ** Represents the hypothetical interest expense we would incur (using the incremental borrowing rate) if the property under our operating leases were owned or accounted for as finance leases. UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Non-GAAP Measures Reconciliation to GAAP (unaudited) Return on Average Common Shareholders' Equity Millions, Except Percentages 2024 2023 Net income $ 6,747 $ 6,379 Average equity $ 15,839 $ 13,476 Return on average common shareholders' equity 42.6 % 47.3 % Return on Invested Capital as Adjusted (ROIC) Millions, Except Percentages 2024 2023 Net income $ 6,747 $ 6,379 Interest expense 1,269 1,340 Interest on average operating lease liabilities 55 58 Taxes on interest (308 ) (315 ) Net operating profit after taxes as adjusted $ 7,763 $ 7,462 Average equity $ 15,839 $ 13,476 Average debt 31,886 32,953 Average operating lease liabilities 1,436 1,616 Average invested capital as adjusted $ 49,161 $ 48,045 Return on invested capital as adjusted 15.8 % 15.5 %   * ROIC is considered a non-GAAP financial measure by SEC Regulation G and Item 10 of SEC Regulation S-K and may not be defined and calculated by other companies in the same manner. We believe this measure is important to management and investors in evaluating the efficiency and effectiveness of our long-term capital investments. In addition, we currently use ROIC as a performance criterion in determining certain elements of equity compensation for our executives. ROIC should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP. The most comparable GAAP measure is return on average common shareholders’ equity. The tables above provide reconciliations from return on average common shareholders’ equity to ROIC. At December 31, 2024 and 2023, the incremental borrowing rate on operating lease liabilities was 3.8% and 3.6%, respectively.

Related News