Union Pacific Earnings 2020-06-30

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

unp-20200630x10q

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 June 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 July 17, 2020, there were 678,838,800 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 June 30, 2020 and 2019	3
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
	For the Three Months Ended June 30, 2020 and 2019	3
	CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
	For the Six Months Ended June 30, 2020 and 2019	4
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
	For the Six Months Ended June 30, 2020 and 2019	4
	CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
	At June 30, 2020 and December 31, 2019	5
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	For the Six Months Ended June 30, 2020 and 2019	6
	CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN COMMON SHAREHOLDERS’ EQUITY (Unaudited)
	For the Three and Six Months Ended June 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	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37

PART II. OTHER INFORMATION



Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
Signatures		41
Certifications		42

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 June 30,	2020		2019
Operating revenues:
Freight revenues	$	3,972	$	5,236
Other revenues		272		360
Total operating revenues		4,244		5,596
Operating expenses:
Compensation and benefits		905		1,145
Depreciation		551		551
Purchased services and materials		441		573
Fuel		247		560
Equipment and other rents		211		260
Other		235		247
Total operating expenses		2,590		3,336
Operating income		1,654		2,260
Other income (Note 6)		131		57
Interest expense		(289)		(259)
Income before income taxes		1,496		2,058
Income taxes		(364)		(488)
Net income	$	1,132	$	1,570
Share and Per Share (Note 8):
Earnings per share - basic	$	1.67	$	2.23
Earnings per share - diluted	$	1.67	$	2.22
Weighted average number of shares - basic		677.7		705.5
Weighted average number of shares - diluted		679.2		708.0

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Union Pacific Corporation and Subsidiary Companies



Millions,
for the Three Months Ended June 30,	2020		2019
Net income	$	1,132	$	1,570
Other comprehensive income/(loss):
Defined benefit plans		18		82
Foreign currency translation		(61)		(2)
Total other comprehensive income/(loss) [a]		(43)		80
Comprehensive income	$	1,089	$	1,650

[a]Net of deferred taxes of ($5) million and ($27) million during the three months ended June 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 Six Months Ended June 30,	2020		2019
Operating revenues:
Freight revenues	$	8,852	$	10,246
Other revenues		621		734
Total operating revenues		9,473		10,980
Operating expenses:
Compensation and benefits		1,964		2,350
Depreciation		1,098		1,100
Purchased services and materials		962		1,149
Fuel		681		1,091
Equipment and other rents		438		518
Other		533		552
Total operating expenses		5,676		6,760
Operating income		3,797		4,220
Other income (Note 6)		184		134
Interest expense		(567)		(506)
Income before income taxes		3,414		3,848
Income taxes		(808)		(887)
Net income	$	2,606	$	2,961
Share and Per Share (Note 8):
Earnings per share - basic	$	3.83	$	4.16
Earnings per share - diluted	$	3.82	$	4.15
Weighted average number of shares - basic		681.0		711.2
Weighted average number of shares - diluted		682.7		713.8

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Union Pacific Corporation and Subsidiary Companies



Millions,
for the Six Months Ended June 30,	2020		2019
Net income	$	2,606	$	2,961
Other comprehensive income/(loss):
Defined benefit plans		40		92
Foreign currency translation		(56)		25
Total other comprehensive income/(loss) [a]		(16)		117
Comprehensive income	$	2,590	$	3,078

[a]Net of deferred taxes of ($12) million and ($31) million during the six months ended June 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



	June 30,		December 31,
Millions, Except Share and Per Share Amounts	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	2,706	$	831
Short-term investments (Note 13)		60		60
Accounts receivable, net (Note 10)		1,388		1,595
Materials and supplies		668		751
Other current assets		261		222
Total current assets		5,083		3,459
Investments		2,042		2,050
Net properties (Note 11)		54,270		53,916
Operating lease assets (Note 16)		1,700		1,812
Other assets		460		436
Total assets	$	63,555	$	61,673
Liabilities and Common Shareholders' Equity
Current liabilities:
Accounts payable and other current liabilities (Note 12)	$	3,289	$	3,094
Debt due within one year (Note 14)		1,990		1,257
Total current liabilities		5,279		4,351
Debt due after one year (Note 14)		26,439		23,943
Operating lease liabilities (Note 16)		1,320		1,471
Deferred income taxes		12,171		11,992
Other long-term liabilities		1,894		1,788
Commitments and contingencies (Note 17)
Total liabilities		47,103		43,545
Common shareholders' equity:
Common shares, $2.50 par value, 1,400,000,000 authorized;
1,112,266,423 and 1,112,014,480 issued; 678,710,739 and 692,100,651
outstanding, respectively		2,781		2,780
Paid-in-surplus		4,135		4,523
Retained earnings		49,892		48,605
Treasury stock		(38,984)		(36,424)
Accumulated other comprehensive loss (Note 9)		(1,372)		(1,356)
Total common shareholders' equity		16,452		18,128
Total liabilities and common shareholders' equity	$	63,555	$	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 Six Months Ended June 30,	2020		2019
Operating Activities
Net income	$	2,606	$	2,961
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		1,098		1,100
Deferred and other income taxes		171		209
Other operating activities, net		(9)		41
Changes in current assets and liabilities:
Accounts receivable, net		207		(54)
Materials and supplies		83		(33)
Other current assets		(36)		(85)
Accounts payable and other current liabilities		(197)		(185)
Income and other taxes		469		(54)
Cash provided by operating activities		4,392		3,900
Investing Activities
Capital investments		(1,599)		(1,560)
Proceeds from asset sales		107		30
Maturities of short-term investments (Note 13)		75		105
Purchases of short-term investments (Note 13)		(75)		(100)
Other investing activities, net		75		(85)
Cash used in investing activities		(1,417)		(1,610)
Financing Activities
Debt issued (Note 14)		4,004		2,992
Share repurchase programs (Note 18)		(2,556)		(3,629)
Dividends paid		(1,319)		(1,248)
Debt repaid		(770)		(604)
Accelerated share repurchase programs pending final settlement		(400)		(500)
Net issuance of commercial paper (Note 14)		(1)		471
Other financing activities, net		(65)		(29)
Cash used in financing activities		(1,107)		(2,547)
Net change in cash, cash equivalents and restricted cash		1,868		(257)
Cash, cash equivalents, and restricted cash at beginning of year		856		1,328
Cash, cash equivalents, and restricted cash at end of period	$	2,724	$	1,071
Supplemental Cash Flow Information
Non-cash investing and financing activities:
Capital investments accrued but not yet paid	$	141	$	136
Common shares repurchased but not yet paid		-		19
Cash (paid for)/received from:
Income taxes, net of refunds	$	(158)	$	(717)
Interest, net of amounts capitalized		(489)		(504)
Reconciliation of cash, cash equivalents, and restricted cash
to the Condensed Consolidated Statement of Financial Position:
Cash and cash equivalents	$	2,706	$	1,049
Restricted cash equivalents in other current assets		6		10
Restricted cash equivalents in other assets		12		12
Total cash, cash equivalents and restricted cash equivalents per above	$	2,724	$	1,071

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 April 1, 2019

1,112.0

(403.6)

$ 2,780

$ 3,929

$ 46,049

$ (33,638)

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	2020-06-30	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	2020-09-01	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-20200630xex31_a.htm
EX-31.B	unp-20200630xex31_b.htm
EX-32	unp-20200630xex32.htm

UNP 10Q Quarterly Report

Union Pacific Earnings 2020-06-30