Union Pacific Earnings 2020-09-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

unp-20200930x10q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ____________

Commission File Number 1-6075

UNION PACIFIC CORPORATION

(Exact name of registrant as specified in its charter)

Utah	13-2626465
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1400 Douglas Street, Omaha, Nebraska

(Address of principal executive offices)

68179

(Zip Code)

(402) 544-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each Class	Trading Symbol	Name of each exchange on which registered
Common Stock (Par Value $2.50 per share)	UNP	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	þ	Accelerated Filer	¨	Non-Accelerated Filer	¨
Smaller Reporting Company	¨	Emerging Growth Company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

¨ Yes x No

As of October 16, 2020, there were 673,868,865 shares of the Registrant's Common Stock outstanding.

Table of Contents

TABLE OF CONTENTS

UNION PACIFIC CORPORATION

AND SUBSIDIARY COMPANIES

PART I. FINANCIAL INFORMATION


Item 1.	Condensed Consolidated Financial Statements:
	CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
	For the Three Months Ended September 30, 2020 and 2019	3
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
	For the Three Months Ended September 30, 2020 and 2019	3
	CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
	For the Nine Months Ended September 30, 2020 and 2019	4
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
	For the Nine Months Ended September 30, 2020 and 2019	4
	CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
	At September 30, 2020 and December 31, 2019	5
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	For the Nine Months Ended September 30, 2020 and 2019	6
	CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN COMMON SHAREHOLDERS’ EQUITY (Unaudited)
	For the Three and Nine Months Ended September 30, 2020 and 2019	7
	NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38

PART II. OTHER INFORMATION



Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
Signatures		42
Certifications		43

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Condensed Consolidated Statements of Income (Unaudited)

Union Pacific Corporation and Subsidiary Companies



Millions, Except Per Share Amounts, ‎
for the Three Months Ended September 30,	2020		2019
Operating revenues:
Freight revenues	$	4,596	$	5,146
Other revenues		323		370
Total operating revenues		4,919		5,516
Operating expenses:
Compensation and benefits		1,008		1,134
Depreciation		555		557
Purchased services and materials		508		574
Fuel		301		504
Equipment and other rents		217		236
Other		299		277
Total operating expenses		2,888		3,282
Operating income		2,031		2,234
Other income (Note 6)		37		53
Interest expense		(295)		(266)
Income before income taxes		1,773		2,021
Income taxes		(410)		(466)
Net income	$	1,363	$	1,555
Share and Per Share (Note 8):
Earnings per share - basic	$	2.02	$	2.22
Earnings per share - diluted	$	2.01	$	2.22
Weighted average number of shares - basic		675.0		699.3
Weighted average number of shares - diluted		676.8		701.9

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Union Pacific Corporation and Subsidiary Companies



Millions,
for the Three Months Ended September 30,	2020		2019
Net income	$	1,363	$	1,555
Other comprehensive income/(loss):
Defined benefit plans		18		11
Foreign currency translation		3		(18)
Total other comprehensive income/(loss) [a]		21		(7)
Comprehensive income	$	1,384	$	1,548

[a]Net of deferred taxes of ($6) million and ($4) million during the three months ended September 30, 2020 and 2019, respectively. The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

‎

Table of Contents

Condensed Consolidated Statements of Income (Unaudited)

Union Pacific Corporation and Subsidiary Companies



Millions, Except Per Share Amounts, ‎
for the Nine Months Ended September 30,	2020		2019
Operating revenues:
Freight revenues	$	13,448	$	15,392
Other revenues		944		1,104
Total operating revenues		14,392		16,496
Operating expenses:
Compensation and benefits		2,972		3,484
Depreciation		1,653		1,657
Purchased services and materials		1,470		1,723
Fuel		982		1,595
Equipment and other rents		655		754
Other		832		829
Total operating expenses		8,564		10,042
Operating income		5,828		6,454
Other income (Note 6)		221		187
Interest expense		(862)		(772)
Income before income taxes		5,187		5,869
Income taxes		(1,218)		(1,353)
Net income	$	3,969	$	4,516
Share and Per Share (Note 8):
Earnings per share - basic	$	5.85	$	6.39
Earnings per share - diluted	$	5.83	$	6.36
Weighted average number of shares - basic		679.0		707.2
Weighted average number of shares - diluted		680.7		709.8

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Union Pacific Corporation and Subsidiary Companies



Millions,
for the Nine Months Ended September 30,	2020		2019
Net income	$	3,969	$	4,516
Other comprehensive income/(loss):
Defined benefit plans		58		103
Foreign currency translation		(53)		7
Total other comprehensive income/(loss) [a]		5		110
Comprehensive income	$	3,974	$	4,626

[a] Net of deferred taxes of ($18) million and ($35) million during the nine months ended September 30, 2020 and 2019, respectively. The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

Table of Contents

Condensed Consolidated Statements of Financial Position (Unaudited)

Union Pacific Corporation and Subsidiary Companies



	September 30,		December 31,
Millions, Except Share and Per Share Amounts	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	2,601	$	831
Short-term investments (Note 13)		60		60
Accounts receivable, net (Note 10)		1,565		1,595
Materials and supplies		649		751
Other current assets		255		222
Total current assets		5,130		3,459
Investments		2,071		2,050
Net properties (Note 11)		54,375		53,916
Operating lease assets (Note 16)		1,642		1,812
Other assets		496		436
Total assets	$	63,714	$	61,673
Liabilities and Common Shareholders' Equity
Current liabilities:
Accounts payable and other current liabilities (Note 12)	$	2,861	$	3,094
Debt due within one year (Note 14)		1,980		1,257
Total current liabilities		4,841		4,351
Debt due after one year (Note 14)		26,080		23,943
Operating lease liabilities (Note 16)		1,293		1,471
Deferred income taxes		12,328		11,992
Other long-term liabilities		1,973		1,788
Commitments and contingencies (Note 17)
Total liabilities		46,515		43,545
Common shareholders' equity:
Common shares, $2.50 par value, 1,400,000,000 authorized;
1,112,246,049 and 1,112,014,840 issued; 675,033,254 and 692,100,651
outstanding, respectively		2,781		2,780
Paid-in-surplus		4,849		4,523
Retained earnings		50,600		48,605
Treasury stock		(39,680)		(36,424)
Accumulated other comprehensive loss (Note 9)		(1,351)		(1,356)
Total common shareholders' equity		17,199		18,128
Total liabilities and common shareholders' equity	$	63,714	$	61,673

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

Table of Contents

Condensed Consolidated Statements of Cash Flows (Unaudited)

Union Pacific Corporation and Subsidiary Companies



Millions,
for the Nine Months Ended September 30,	2020		2019
Operating Activities
Net income	$	3,969	$	4,516
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		1,653		1,657
Deferred and other income taxes		327		297
Other operating activities, net		119		102
Changes in current assets and liabilities:
Accounts receivable, net		30		105
Materials and supplies		102		(29)
Other current assets		(7)		(12)
Accounts payable and other current liabilities		(215)		(257)
Income and other taxes		15		(115)
Cash provided by operating activities		5,993		6,264
Investing Activities
Capital investments		(2,294)		(2,495)
Proceeds from asset sales		119		63
Maturities of short-term investments (Note 13)		106		120
Purchases of short-term investments (Note 13)		(106)		(110)
Other investing activities, net		94		(85)
Cash used in investing activities		(2,081)		(2,507)
Financing Activities
Debt issued (Note 14)		4,004		3,986
Share repurchase programs (Note 18)		(2,956)		(5,162)
Dividends paid		(1,974)		(1,925)
Debt repaid		(832)		(642)
Debt exchange		(327)		-
Net issuance of commercial paper (Note 14)		(2)		(5)
Other financing activities, net		(63)		(34)
Cash used in financing activities		(2,150)		(3,782)
Net change in cash, cash equivalents and restricted cash		1,762		(25)
Cash, cash equivalents, and restricted cash at beginning of year		856		1,328
Cash, cash equivalents, and restricted cash at end of period	$	2,618	$	1,303
Supplemental Cash Flow Information
Non-cash investing and financing activities:
Capital investments accrued but not yet paid	$	152	$	151
Common shares repurchased but not yet paid		-		42
Cash (paid for)/received from:
Income taxes, net of refunds	$	(925)	$	(1,104)
Interest, net of amounts capitalized		(911)		(855)
Reconciliation of cash, cash equivalents, and restricted cash
to the Condensed Consolidated Statement of Financial Position:
Cash and cash equivalents	$	2,601	$	1,250
Restricted cash equivalents in other current assets		5		41
Restricted cash equivalents in other assets		12		12
Total cash, cash equivalents and restricted cash equivalents per above	$	2,618	$	1,303

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

Table of Contents

Condensed Consolidated Statements of Changes in Common Shareholders’ Equity (Unaudited)

Union Pacific Corporation and Subsidiary Companies

‎Millions

Common
‎Shares

Treasury
‎Shares

Common Shares

Paid-in-Surplus

Retained Earnings

Treasury Stock

AOCI
‎[a]

Total

Balance at July 1, 2019

1,112.0

(407.1)

Price	166.05	EPS	9
Shares	710	P/E	19
MCap	117,862	P/FCF	27
Net Debt	23,011	EBIT	8,195
TEV	140,873	TEV/EBIT	17
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-09-30	Filed 2020-10-22
10-Q	2020-06-30	Filed 2020-07-23
10-Q	2020-03-31	Filed 2020-04-23
10-K	2019-12-31	Filed 2020-02-07
10-Q	2019-09-30	Filed 2019-10-17
10-Q	2019-06-30	Filed 2019-07-18
10-Q	2019-03-31	Filed 2019-04-18
10-K	2018-12-31	Filed 2019-02-08
10-Q	2018-09-30	Filed 2018-10-25
10-Q	2018-06-30	Filed 2018-07-19
10-Q	2018-03-31	Filed 2018-04-26
10-K	2017-12-31	Filed 2018-02-09
10-Q	2017-09-30	Filed 2017-10-26
10-Q	2017-06-30	Filed 2017-07-20
10-Q	2017-03-31	Filed 2017-04-27
10-K	2016-12-31	Filed 2017-02-03
10-Q	2016-09-30	Filed 2016-10-20
10-Q	2016-06-30	Filed 2016-07-21
10-Q	2016-03-31	Filed 2016-04-21
10-K	2015-12-31	Filed 2016-02-05
10-Q	2015-09-30	Filed 2015-10-22
10-Q	2015-06-30	Filed 2015-07-24
10-Q	2015-03-31	Filed 2015-04-23
10-K	2014-12-31	Filed 2015-02-06
10-Q	2014-09-30	Filed 2014-10-23
10-Q	2014-06-30	Filed 2014-07-25
10-Q	2014-03-31	Filed 2014-04-17
10-K	2013-12-31	Filed 2014-02-07
10-Q	2013-09-30	Filed 2013-10-17
10-Q	2013-06-30	Filed 2013-07-19
10-Q	2013-03-31	Filed 2013-04-18
10-K	2012-12-31	Filed 2013-02-08
10-Q	2012-09-30	Filed 2012-10-18
10-Q	2012-06-30	Filed 2012-07-20
10-Q	2012-03-31	Filed 2012-04-19
10-K	2011-12-31	Filed 2012-02-03
10-Q	2011-09-30	Filed 2011-10-21
10-Q	2011-06-30	Filed 2011-07-22
10-Q	2011-03-31	Filed 2011-04-21
10-Q	2010-09-30	Filed 2010-10-22
10-Q	2010-06-30	Filed 2010-07-23
10-Q	2010-03-31	Filed 2010-04-23
10-K	2009-12-31	Filed 2010-02-05

8-K	2020-11-17	Regulation FD
8-K	2020-10-22	Earnings, Exhibits
8-K	2020-10-20	Officers, Regulation FD, Exhibits
8-K	2020-09-15	Regulation FD, Other Events, Exhibits
8-K	2020-09-01	Other Events, Exhibits
8-K	2020-08-28	Officers
8-K	2020-08-18	Other Events, Exhibits
8-K	2020-08-12	Regulation FD
8-K	2020-08-11	Regulation FD
8-K	2020-07-23	Earnings, Exhibits
8-K	2020-06-09
8-K	2020-05-20
8-K	2020-05-15
8-K	2020-04-23
8-K	2020-04-07
8-K	2020-03-31
8-K	2020-03-10
8-K	2020-03-03
8-K	2020-02-18
8-K	2020-02-18
8-K	2020-01-31
8-K	2020-01-23
8-K	2019-12-04
8-K	2019-11-19
8-K	2019-11-14
8-K	2019-11-04
8-K	2019-10-21
8-K	2019-10-17
8-K	2019-09-26
8-K	2019-09-04
8-K	2019-08-05
8-K	2019-07-18
8-K	2019-05-17
8-K	2019-04-18
8-K	2019-03-07
8-K	2019-03-06
8-K	2019-02-25
8-K	2019-02-19
8-K	2019-02-08
8-K	2019-01-29
8-K	2019-01-24
8-K	2019-01-09
8-K	2019-01-07
8-K	2018-10-25
8-K	2018-09-17
8-K	2018-09-06
8-K	2018-08-24
8-K	2018-08-15
8-K	2018-07-26
8-K	2018-07-19
8-K	2018-06-14
8-K	2018-06-08
8-K	2018-06-01
8-K	2018-05-11
8-K	2018-04-26
8-K	2018-04-06
8-K	2018-02-22
8-K	2018-02-14
8-K	2018-02-14
8-K	2018-02-13
8-K	2018-01-25
8-K	2018-01-09

EX-31.A	unp-20200930xex31_a.htm
EX-31.B	unp-20200930xex31_b.htm
EX-32	unp-20200930xex32.htm

UNP 10Q Quarterly Report

Union Pacific Earnings 2020-09-30