Union Pacific Reports Fourth Quarter and Full Year 2014 Results

OMAHA, Neb., Jan. 22, 2015 /PRNewswire/ --

All-Time Quarterly Records

• Diluted earnings per share of $1.61 improved 27 percent.
• Operating income totaled $2.4 billion, up 20 percent.
• Operating ratio of 61.4 percent improved 3.6 points.

Full Year Records

• Diluted earnings per share of $5.75 improved 22 percent.
• Operating revenues totaled $24.0 billion, up 9 percent.
• Operating income totaled $8.8 billion, up 18 percent.
• Operating ratio of 63.5 percent improved 2.6 points.

Union Pacific Corporation UNP today reported 2014 fourth quarter net income of $1.4 billion, or $1.61 per diluted share, compared to $1.2 billion, or $1.27 per diluted share, in the fourth quarter 2013.

"Union Pacific achieved record quarterly financial results, driven by strong volumes, solid core pricing and productivity gains," said Jack Koraleski, Union Pacific chief executive officer.  "Robust volumes challenged our network for much of the year, and we remained focused on adding the necessary resources to safely improve service.  We are encouraged with the progress we are making."

Fourth Quarter Summary

Operating revenue increased in the fourth quarter 2014 to $6.2 billion, a 9 percent increase over fourth quarter 2013.  Fourth quarter business volumes, as measured by total revenue carloads, increased 6 percent compared to 2013.  Volume increased in all business groups – led by growth in industrial products and coal.  In addition:

• Quarterly freight revenue increased 9 percent compared to the fourth quarter 2013, driven by volume growth and core pricing gains.
• The average quarterly diesel fuel price of $2.66 per gallon in the fourth quarter 2014 was down 14 percent compared to the fourth quarter 2013.
• Union Pacific's operating ratio of 61.4 percent was an all-time quarterly record, 3.6 points better than the fourth quarter 2013.  The net impact of lower fuel prices contributed about 1.5 points of this improvement.
• Quarterly train speed, as reported to the Association of American Railroads, was 23.8 mph, 8 percent slower than the fourth quarter 2013.
• The Company repurchased more than 7.7 million shares in the fourth quarter 2014 at an average share price of $113.77 and an aggregate cost of $880 million.

Summary of Fourth Quarter Freight Revenues

• Industrial Products up 15 percent
• Intermodal up 11 percent
• Coal up 9 percent
• Agricultural Products up 9 percent
• Chemicals up 8 percent
• Automotive flat

2014 Full Year Summary

For the full year 2014, Union Pacific reported net income of $5.2 billion or $5.75 per diluted share.  This compares to $4.4 billion or $4.71 per diluted share in 2013, 18 and 22 percent increases, respectively.  Operating revenue totaled a record $24.0 billion versus $22.0 billion in 2013.  Operating income totaled $8.8 billion, an 18 percent increase over 2013.  In addition:

• Freight revenue increased to $22.6 billion, a 9 percent increase over 2013.   Carloadings were up 7 percent versus 2013, with growth in each business group.  Volume growth was led by agricultural products, industrial products, and intermodal.
• Average diesel fuel prices decreased 6 percent to $2.97 per gallon in 2014 from $3.15 per gallon in 2013.
• Union Pacific's operating ratio of 63.5 percent was a full year record, improving 2.6 points from the previous record set in 2013. 
• Train speed, as reported to the Association of American Railroads, was 24.0 mph, 8 percent slower compared to the full year 2013.
• Union Pacific's capital program in 2014 totaled $4.1 billion, an increase of approximately $500 million compared to the full year 2013.
• The Company increased its quarterly declared dividend per share by 10 percent to $0.50 cents per share in the third quarter 2014.  Total dividends declared for the full year 2014 grew 29 percent compared to the full year 2013.
• The Company repurchased more than 32.0 million shares in 2014 at an average share price of $100.65, and an aggregate cost of more than $3.2 billion.

2015 Outlook

"With 2014 behind us, we're intently focused on the year ahead," Koraleski said.  "Overall, the U.S. economy continues to move forward at a moderate pace, but of course, there are always uncertainties.  Clearly, one of the biggest uncertainties is the outlook for energy markets, which will bring both challenges and opportunities as we move ahead.  We're entering the year well-resourced and we're looking forward to safely providing efficient, value-added service for our customers, and increasing returns for our shareholders in 2015."

About Union Pacific

Union Pacific Railroad is the principal operating company of Union Pacific Corporation UNP. One of America's most recognized companies, Union Pacific Railroad connects 23 states in the western two-thirds of the country by rail, providing a critical link in the global supply chain. From 2005-2014, Union Pacific invested more than $31 billion in its network and operations to support America's transportation infrastructure.  The railroad's diversified business mix includes Agricultural Products, Automotive, Chemicals, Coal, Industrial Products and Intermodal. Union Pacific serves many of the fastest-growing U.S. population centers, operates from all major West Coast and Gulf Coast ports to eastern gateways, connects with Canada's rail systems and is the only railroad serving all six major Mexico gateways. Union Pacific provides value to its roughly 10,000 customers by delivering products in a safe, reliable, fuel-efficient and environmentally responsible manner.

Investor contact is Mike Staffenbeal, (402) 544-4227.

Media contact is Aaron Hunt, (402) 544-0100.

Supplemental financial information is attached.

This presentation and related materials contain statements about the Corporation's future that are not statements of historical fact, including specifically the statements regarding the Corporation's expectations with respect to economic conditions; and its ability to generate financial returns, improve network performance, provide quality customer service, and provide returns to its shareholders.  These statements are, or will be, forward-looking statements as defined by the Securities Act of 1933 and 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 Corporation'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 Corporation'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 Corporation'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 Corporation's Annual Report on Form 10-K for 2013, which was filed with the SEC on February 7, 2014.  The Corporation 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 Corporation 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 Corporation does update one or more forward-looking statements, no inference should be drawn that the Corporation will make additional updates with respect thereto or with respect to other forward-looking statements.  References to our 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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SOURCE Union Pacific Corporation