Union Pacific Earnings 2020-03-31

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

unp-20200331x10q

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 March 31, 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 April 17, 2020, there were 678,568,053 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 March 31, 2020 and 2019	3
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
	For the Three Months Ended March 31, 2020 and 2019	3
	CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
	At March 31, 2020 and December 31, 2019	4
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	For the Three Months Ended March 31, 2020 and 2019	5
	CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN COMMON SHAREHOLDERS’ EQUITY (Unaudited)
	For the Three and Three Months Ended March 31, 2020 and 2019	6
	NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

PART II. OTHER INFORMATION



Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39
Signatures		40
Certifications		41

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 March 31,	2020		2019
Operating revenues:
Freight revenues	$	4,880	$	5,010
Other revenues		349		374
Total operating revenues		5,229		5,384
Operating expenses:
Compensation and benefits		1,059		1,205
Depreciation		547		549
Purchased services and materials		521		576
Fuel		434		531
Equipment and other rents		227		258
Other		298		305
Total operating expenses		3,086		3,424
Operating income		2,143		1,960
Other income (Note 6)		53		77
Interest expense		(278)		(247)
Income before income taxes		1,918		1,790
Income taxes		(444)		(399)
Net income	$	1,474	$	1,391
Share and Per Share (Note 8):
Earnings per share - basic	$	2.15	$	1.94
Earnings per share - diluted	$	2.15	$	1.93
Weighted average number of shares - basic		684.3		716.8
Weighted average number of shares - diluted		686.2		719.5

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Union Pacific Corporation and Subsidiary Companies



Millions,
for the Three Months Ended March 31,	2020		2019
Net income	$	1,474	$	1,391
Other comprehensive income/(loss):
Defined benefit plans		22		10
Foreign currency translation		5		27
Total other comprehensive income/(loss) [a]		27		37
Comprehensive income	$	1,501	$	1,428

[a]Net of deferred taxes of ($7) million and ($4) million during the three months ended March 31, 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



	March 31,		December 31,
Millions, Except Share and Per Share Amounts	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	1,130	$	831
Short-term investments (Note 13)		60		60
Accounts receivable, net (Note 10)		1,669		1,595
Materials and supplies		692		751
Other current assets		253		222
Total current assets		3,804		3,459
Investments		2,078		2,050
Net properties (Note 11)		54,121		53,916
Operating lease assets (Note 16)		1,773		1,812
Other assets		440		436
Total assets	$	62,216	$	61,673
Liabilities and Common Shareholders' Equity
Current liabilities:
Accounts payable and other current liabilities (Note 12)	$	3,130	$	3,094
Debt due within one year (Note 14)		1,511		1,257
Total current liabilities		4,641		4,351
Debt due after one year (Note 14)		26,365		23,943
Operating lease liabilities (Note 16)		1,339		1,471
Deferred income taxes		12,088		11,992
Other long-term liabilities		1,792		1,788
Commitments and contingencies (Note 17)
Total liabilities		46,225		43,545
Common shareholders' equity:
Common shares, $2.50 par value, 1,400,000,000 authorized;
1,112,277,525 and 1,112,014,480 issued; 678,558,571 and 692,100,651
outstanding, respectively		2,781		2,780
Paid-in-surplus		4,112		4,523
Retained earnings		49,419		48,605
Treasury stock		(38,992)		(36,424)
Accumulated other comprehensive loss (Note 9)		(1,329)		(1,356)
Total common shareholders' equity		15,991		18,128
Total liabilities and common shareholders' equity	$	62,216	$	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 Three Months Ended March 31,	2020		2019
Operating Activities
Net income	$	1,474	$	1,391
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		547		549
Deferred and other income taxes		91		103
Other operating activities, net		(64)		(53)
Changes in current assets and liabilities:
Accounts receivable, net		(74)		83
Materials and supplies		59		(38)
Other current assets		1		(57)
Accounts payable and other current liabilities		(168)		(259)
Income and other taxes		289		240
Cash provided by operating activities		2,155		1,959
Investing Activities
Capital investments		(807)		(752)
Maturities of short-term investments (Note 13)		70		90
Purchases of short-term investments (Note 13)		(70)		(90)
Proceeds from asset sales		8		14
Other investing activities, net		(8)		(46)
Cash used in investing activities		(807)		(784)
Financing Activities
Debt issued (Note 14)		2,996		2,992
Share repurchase programs (Note 18)		(2,556)		(2,987)
Dividends paid		(660)		(626)
Accelerated share repurchase programs pending final settlement		(400)		(500)
Debt repaid		(305)		(560)
Net issuance of commercial paper (Note 14)		(1)		299
Other financing activities, net		(71)		(23)
Cash used in financing activities		(997)		(1,405)
Net change in cash, cash equivalents and restricted cash		351		(230)
Cash, cash equivalents, and restricted cash at beginning of year		856		1,328
Cash, cash equivalents, and restricted cash at end of period	$	1,207	$	1,098
Supplemental Cash Flow Information
Non-cash investing and financing activities:
Capital investments accrued but not yet paid	$	169	$	149
Common shares repurchased but not yet paid		-		22
Cash (paid for)/received from:
Income taxes, net of refunds	$	(11)	$	(1)
Interest, net of amounts capitalized		(349)		(356)
Reconciliation of cash, cash equivalents, and restricted cash
to the Condensed Consolidated Statement of Financial Position:
Cash and cash equivalents	$	1,130	$	1,059
Restricted cash equivalents in other current assets		65		27
Restricted cash equivalents in other assets		12		12
Total cash, cash equivalents and restricted cash equivalents per above	$	1,207	$	1,098

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 January 1, 2019	1,111.7	(386.6)		$ 2,779		$ 4,449		$ 45,284		$ (30,674)		$ (1,415)		$ 20,423
Net income				-		-		1,391		-		-		1,391
Other comprehensive income				-		-		-		-		37		37
Conversion, stock option ‎ exercises, forfeitures, and other	0.3	1.1		1		(20)		-		45		-		26
Share repurchase programs ‎ (Note 18)	-	(18.1)		-		(500)		-		(3,009)		-		(3,509)
Cash dividends declared ‎ ($0.88 per share)	-	-		-		-		(626)		-		-		(626)
Balance at March 31, 2019	1,112.0	(403.6)		$ 2,780		$ 3,929		$ 46,049		$ (33,638)		$ (1,378)		$ 17,742

Balance at January 1, 2020	1,112.0	(419.9)		$ 2,780		$ 4,523		$ 48,605		$ (36,424)		$ (1,356)		$ 18,128
Net income				-		-		1,474		-		-		1,474
Other comprehensive income				-		-		-		-		27		27
Conversion, stock option ‎ exercises, forfeitures, and other	0.3	0.5		1		(11)		-		(12)		-		(22)
Share repurchase programs ‎ (Note 18)	-	(14.3)		-		(400)		-		(2,556)		-		(2,956)
Cash dividends declared ‎ ($0.97 per share)	-	-		-		-		(660)		-		-		(660)
Balance at March 31, 2020	1,112.3	(433.7)		$ 2,781		$ 4,112		$ 49,419		$ (38,992)		$ (1,329)		$ 15,991

[a]AOCI = Accumulated Other Comprehensive Income/(Loss) (Note 9)

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

‎

Table of Contents

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

For purposes of this report, unless the context otherwise requires, all references herein to the “Corporation”, “Company”, “UPC”, “we”, “us”, and “our” mean Union Pacific Corporation and its subsidiaries, including Union Pacific Railroad Company, which will be separately referred to herein as “UPRR” or the “Railroad”.

1. Basis of Presentation

Our Condensed Consolidated Financial Statements are unaudited and reflect all adjustments (consisting of normal and recurring adjustments) that are, in the opinion of management, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (GAAP). Pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, this Quarterly Report on Form 10-Q should be read in conjunction with our Consolidated Financial Statements and notes thereto contained in our 2019 Annual Report on Form 10-K. Our Consolidated Statement of Financial Position at December 31, 2019, is derived from audited financial statements. The results of operations for the three months ended March 31, 2020, are not necessarily indicative of the results for the entire year ending December 31, 2020.

The Condensed Consolidated Financial Statements are presented in accordance with GAAP as codified in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC).

2. Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13), Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred credit loss model for an expected credit loss model. Ef

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	2020-03-31	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	2020-06-09
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-20200331xex31_a.htm
EX-31.B	unp-20200331xex31_b.htm
EX-32	unp-20200331xex32.htm

UNP 10Q Quarterly Report

Union Pacific Earnings 2020-03-31