Union Pacific Corp 10-Q for FY2021 Q1

Union Pacific Corp (UNP)

10-Q 2021-04-22 For: 2021-03-31

Added on April 08, 2026

About this 10-Q

Union Pacific Corp filed this 10-Q on April 22, 2021, covering the quarter ended March 31, 2021 (FY2021 Q1).

Headline figures

Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $5B; down 4.4% from $5.23B a year earlier
Net income: $1.34B; down 9.0% from net income of $1.47B a year earlier
Diluted EPS: $2.00; down 7.0% from $2.15 a year earlier

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


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


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


Item 1.	Condensed Consolidated Financial Statements:
	CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
	For the Three Months Ended March 31, 2021 and 2020	3
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
	For the Three Months Ended March 31, 2021 and 2020	3
	CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
	At March 31, 2021, and December 31, 2020	4
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	For the Three Months Ended March 31, 2021 and 2020	5
	CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN COMMON SHAREHOLDERS’ EQUITY (Unaudited)
	For the Three Months Ended March 31, 2021 and 2020	6
	NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30



Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
Signatures		33
Certifications		34


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



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



Millions, Except Per Share Amounts, ‎
for the Three Months Ended March 31,	2021		2020
Operating revenues:
Freight revenues	$	4,649	$	4,880
Other revenues		352		349
Total operating revenues		5,001		5,229
Operating expenses:
Compensation and benefits		1,026		1,059
Depreciation		549		547
Purchased services and materials		490		521
Fuel		411		434
Equipment and other rents		212		227
Other		320		298
Total operating expenses		3,008		3,086
Operating income		1,993		2,143
Other income, net (Note 6)		51		53
Interest expense		(290)		(278)
Income before income taxes		1,754		1,918
Income taxes		(413)		(444)
Net income	$	1,341	$	1,474
Share and Per Share (Note 7):
Earnings per share - basic	$	2.01	$	2.15
Earnings per share - diluted	$	2.00	$	2.15
Weighted average number of shares - basic		667.6		684.3
Weighted average number of shares - diluted		669.2		686.2



Millions,
for the Three Months Ended March 31,	2021		2020
Net income	$	1,341	$	1,474
Other comprehensive income/(loss):
Defined benefit plans		25		22
Foreign currency translation		(26)		5
Total other comprehensive income/(loss) [a]		(1)		27
Comprehensive income	$	1,340	$	1,501



	March 31,		December 31,
Millions, Except Share and Per Share Amounts	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	1,183	$	1,799
Short-term investments (Note 12)		60		60
Accounts receivable, net (Note 9)		1,610		1,505
Materials and supplies		659		638
Other current assets		207		212
Total current assets		3,719		4,214
Investments		2,167		2,164
Properties, net (Note 10)		54,062		54,161
Operating lease assets		1,581		1,610
Other assets		264		249
Total assets	$	61,793	$	62,398
Liabilities and Common Shareholders' Equity
Current liabilities:
Accounts payable and other current liabilities (Note 11)	$	3,306	$	3,104
Debt due within one year (Note 13)		1,565		1,069
Total current liabilities		4,871		4,173
Debt due after one year (Note 13)		25,117		25,660
Operating lease liabilities		1,171		1,283
Deferred income taxes		12,307		12,247
Other long-term liabilities		2,073		2,077
Commitments and contingencies (Note 14)
Total liabilities		45,539		45,440
Common shareholders' equity:
Common shares, $2.50 par value, 1,400,000,000 authorized;
1,112,478,704 and 1,112,227,784 issued; 665,134,519 and 671,351,360
outstanding, respectively		2,781		2,781
Paid-in-surplus		4,874		4,864
Retained earnings		52,019		51,326
Treasury stock		(41,826)		(40,420)
Accumulated other comprehensive loss (Note 8)		(1,594)		(1,593)
Total common shareholders' equity		16,254		16,958
Total liabilities and common shareholders' equity	$	61,793	$	62,398



‎Millions	Common ‎Shares	Treasury ‎Shares	Common Shares		Paid-in-Surplus		Retained Earnings		Treasury Stock		AOCI ‎[a]		Total
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 15)	-	(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

Balance at January 1, 2021	1,112.2	(440.9)		$ 2,781		$ 4,864		$ 51,326		$ (40,420)		$ (1,593)		$ 16,958
Net income				-		-		1,341		-		-		1,341
Other comprehensive loss				-		-		-		-		(1)		(1)
Conversion, stock option ‎ exercises, forfeitures, and other	0.3	0.2		-		10		-		(4)		-		6
Share repurchase programs ‎ (Note 15)	-	(6.7)		-		-		-		(1,402)		-		(1,402)
Cash dividends declared ‎ ($0.97 per share)	-	-		-		-		(648)		-		-		(648)
Balance at March 31, 2021	1,112.5	(447.4)		$ 2,781		$ 4,874		$ 52,019		$ (41,826)		$ (1,594)		$ 16,254



Weighted-Average Assumptions	2021		2020
Risk-free interest rate		0.4%		1.5%
Dividend yield		1.9%		2.1%
Expected life (years)		4.6		4.9
Volatility		28.3%		23.4%
Weighted-average grant-date fair value of options granted	$	39.97	$	32.20



	Options (thous.)	Weighted-Average ‎Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value (millions)
Outstanding at January 1, 2021	2,569	$	132.49	6.4	yrs.	$	195
Granted	387		204.45		N/A		N/A
Exercised	(252)		122.76		N/A		N/A
Forfeited or expired	(34)		136.24		N/A		N/A
Outstanding at March 31, 2021	2,670	$	143.79	6.7	yrs.	$	204
Vested or expected to vest at March 31, 2021	2,644	$	143.51	6.7	yrs.	$	203
Options exercisable at March 31, 2021	1,814	$	123.73	5.6	yrs.	$	175



	Shares ‎(thous.)	Weighted-Average ‎Grant-Date Fair Value
Nonvested at January 1, 2021	1,476	$	141.06
Granted	279		204.55
Vested	(409)		107.82
Forfeited	(16)		156.98
Nonvested at March 31, 2021	1,330	$	164.41



Millions,	Pension				OPEB
for the Three Months Ended March 31,	2021		2020		2021		2020
Service cost	$	30	$	27	$	-	$	-
Interest cost		26		34		1		1
Expected return on plan assets		(67)		(70)		-		-
Amortization of:
Prior service cost/(credit)		-		-		(4)		(3)
Actuarial loss		36		28		2		2
Net periodic benefit cost	$	25	$	19	$	(1)	$	-



Millions, Except Estimated Useful Life			Accumulated		Net Book		Estimated
As of March 31, 2021	Cost		Depreciation		Value		Useful Life
Land	$	5,245	$	N/A	$	5,245	N/A
Road:
Rail and other track material		17,693		6,698		10,995	43
Ties		11,121		3,387		7,734	34
Ballast		5,956		1,785		4,171	34
Other roadway [a]		21,058		4,386		16,672	48
Total road		55,828		16,256		39,572	N/A
Equipment:
Locomotives		9,322		3,605		5,717	17
Freight cars		2,157		801		1,356	25
Work equipment and other		1,108		361		747	18
Total equipment		12,587		4,767		7,820	N/A
Technology and other		1,211		535		676	12
Construction in progress		749		-		749	N/A
Total	$	75,620	$	21,558	$	54,062	N/A



Millions, Except Estimated Useful Life			Accumulated		Net Book		Estimated
As of December 31, 2020	Cost		Depreciation		Value		Useful Life
Land	$	5,246	$	N/A	$	5,246	N/A
Road:
Rail and other track material		17,620		6,631		10,989	42
Ties		11,051		3,331		7,720	34
Ballast		5,926		1,753		4,173	34
Other roadway [a]		21,030		4,329		16,701	48
Total road		55,627		16,044		39,583	N/A
Equipment:
Locomotives		9,375		3,555		5,820	17
Freight cars		2,118		789		1,329	25
Work equipment and other		1,107		351		756	18
Total equipment		12,600		4,695		7,905	N/A
Technology and other		1,199		520		679	13
Construction in progress		748		-		748	N/A
Total	$	75,420	$	21,259	$	54,161	N/A



Millions,
for the Three Months Ended March 31,	2021		2020
Beginning balance	$	270	$	265
Current year accruals		18		18
Changes in estimates for prior years		21		2
Payments		(16)		(15)
Ending balance at March 31	$	293	$	270
Current portion, ending balance at March 31	$	60	$	62



	Number of Shares Purchased		Average Price Paid [a]
	2021	2020	2021		2020
First quarter [b]	6,691,421	14,305,793	$	209.50	$	178.66
Remaining number of shares that may be repurchased under current authority				104,331,549



Millions, Except Per Share Amounts,
for the Three Months Ended March 31,	2021		2020
Net income	$	1,341	$	1,474
Weighted-average number of shares outstanding:
Basic		667.6		684.3
Dilutive effect of stock options		0.8		0.9
Dilutive effect of retention shares and units		0.8		1.0
Diluted		669.2		686.2
Earnings per share – basic	$	2.01	$	2.15
Earnings per share – diluted	$	2.00	$	2.15
Stock options excluded as their inclusion would be anti-dilutive		0.3		0.7



Millions	Defined ‎benefit ‎plans		Foreign ‎currency ‎translation		Total
Balance at January 1, 2021	$	(1,381)	$	(212)	$	(1,593)
Other comprehensive income/(loss) before reclassifications		(1)		(26)		(27)
Amounts reclassified from accumulated other comprehensive income/(loss) [a]		26		-		26
Net year-to-date other comprehensive income/(loss), ‎net of taxes of ($8) million		25		(26)		(1)
Balance at March 31, 2021	$	(1,356)	$	(238)	$	(1,594)

Balance at January 1, 2020	$	(1,150)	$	(206)	$	(1,356)
Other comprehensive income/(loss) before reclassifications		2		5		7
Amounts reclassified from accumulated other comprehensive income/(loss) [a]		20		-		20
Net year-to-date other comprehensive income/(loss), ‎net of taxes of ($7) million		22		5		27
Balance at March 31, 2020	$	(1,128)	$	(201)	$	(1,329)



	Mar. 31,		Dec. 31,
Millions	2021		2020
Income and other taxes payable	$	974	$	635
Accounts payable		634		612
Accrued wages and vacation		345		340
Current operating lease liabilities		294		321
Interest payable		205		326
Accrued casualty costs		177		177
Equipment rents payable		101		101
Other		576		592
Total accounts payable and other current liabilities	$	3,306	$	3,104

‎

Revenue Carloads
Thousands,			%
for the Three Months Ended March 31,	2021	2020	Change
Grain & grain products	203	175	16	%
Fertilizer	44	46	(4)
Food & refrigerated	45	48	(6)
Coal & renewables	174	208	(16)
Bulk	466	477	(2)
Industrial chemicals & plastics	140	154	(9)
Metals & minerals	146	174	(16)
Forest products	60	56	7
Energy & specialized markets	139	162	(14)
Industrial	485	546	(11)
Automotive	180	208	(13)
Intermodal [a]	796	709	12
Premium	976	917	6
Total	1,927	1,940	(1)	%



Average Revenue per Car					%
for the Three Months Ended March 31,	2021		2020		Change
Grain & grain products	$	3,782	$	3,940	(4)	%
Fertilizer		3,852		3,768	2
Food & refrigerated		5,234		5,277	(1)
Coal & renewables		1,958		2,022	(3)
Bulk		3,246		3,219	1
Industrial chemicals & plastics		3,113		3,205	(3)
Metals & minerals		2,563		2,697	(5)
Forest products		5,244		5,457	(4)
Energy & specialized markets		3,828		3,866	(1)
Industrial		3,417		3,469	(1)
Automotive		2,485		2,525	(2)
Intermodal [a]		1,299		1,307	(1)
Premium		1,517		1,583	(4)
Average	$	2,413	$	2,516	(4)	%



Millions, Except Ratios	Mar. 31,		Dec. 31,
for the Trailing Twelve Months Ended [a]	2021		2020
Net income	$	5,216	$	5,349
Add:
Income tax expense		1,600		1,631
Depreciation		2,212		2,210
Interest expense		1,153		1,141
EBITDA	$	10,181	$	10,331
Adjustments:
Other income, net		(285)		(287)
Interest on operating lease liabilities [b]		53		59
Adjusted EBITDA	$	9,949	$	10,103
Debt	$	26,682	$	26,729
Operating lease liabilities		1,465		1,604
Unfunded pension and OPEB, net of taxes of $190 and $195		619		637
Adjusted debt	$	28,766	$	28,970
Adjusted debt / Adjusted EBITDA		2.9		2.9



Cash Flows
Millions,
for the Three Months Ended March 31,	2021		2020
Cash provided by operating activities	$	1,958	$	2,155
Cash used in investing activities		(505)		(807)
Cash used in financing activities		(2,073)		(997)
Net change in cash, cash equivalents and restricted cash	$	(620)	$	351



			Apr. 1		Payments Due by Dec. 31,
			through
Contractual Obligations			Dec. 31,											After
Millions	Total		2021		2022		2023		2024		2025		2025		Other
Debt [a]	$	48,124	$	1,574	$	2,280	$	2,246	$	2,265	$	2,245	$	37,514	$	-
Purchase obligations [b]		3,289		1,318		872		271		208		162		458		-
Operating leases [c]		1,678		126		284		240		230		226		572		-
Finance lease obligations [d]		462		80		111		81		68		45		77		-
Other postretirement benefits [e]		398		37		45		44		39		39		194		-
Income tax contingencies [f]		76		1		-		-		-		-		-		75
Total contractual obligations	$	54,027	$	3,136	$	3,592	$	2,882	$	2,810	$	2,717	$	38,815	$	75



Period	Total Number of ‎Shares ‎ Purchased [a]	Average ‎Price Paid ‎ Per Share		Total Number of Shares ‎Purchased as Part of a ‎Publicly Announced Plan ‎ or Program	Maximum Number of ‎Shares That May Be ‎Purchased Under Current ‎ Authority [b]
Jan. 1 through Jan. 31	1,634,874	$	204.75	1,591,207	109,431,763
Feb. 1 through Feb. 28	2,518,152		206.89	2,347,684	107,084,079
Mar. 1 through Mar. 31	2,773,719		212.25	2,752,530	104,331,549
Total	6,926,745	$	208.53	6,691,421	N/A



Exhibit No.	Description

Filed with this Statement
31(a)	Certifications Pursuant to Rule 13a-14(a), of the Exchange Act, as Adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – Lance M. Fritz.
31(b)	Certifications Pursuant to Rule 13a-14(a), of the Exchange Act, as Adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – Jennifer L. Hamann
32	Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Lance M. Fritz and Jennifer L. Hamann
101	The following financial and related information from Union Pacific Corporation’s Quarterly Report on Form 10-Q for the period ended March 31, 2021 (filed with the SEC on April 22, 2021), formatted in Inline Extensible Business Reporting Language (iXBRL) includes (i) Condensed Consolidated Statements of Income for the periods ended March 31, 2021 and 2020, (ii) Condensed Consolidated Statements of Comprehensive Income for the periods ended March 31, 2021 and 2020, (iii) Condensed Consolidated Statements of Financial Position at March 31, 2021, and December 31, 2020, (iv) Condensed Consolidated Statements of Cash Flows for the periods ended March 31, 2021 and 2020, (v) Condensed Consolidated Statements of Changes in Common Shareholders’ Equity for the periods ended March 31, 2021 and 2020, and (vi) the Notes to the Condensed Consolidated Financial Statements.
104	Cover Page Interactive Data File, formatted in Inline XBRL (contained in Exhibit 101).
Incorporated by Reference
3(a)	Restated Articles of Incorporation of UPC, as amended and restated through June 27, 2011, and as further amended May 15, 2014, are incorporated herein by reference to Exhibit 3(a) to the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.
3(b)	By-Laws of UPC, as amended, effective November 19, 2015, are incorporated herein by reference to Exhibit 3.2 to the Corporation’s Current Report on Form 8-K dated November 19, 2015.


By	/s/ Jennifer L. Hamann
	Jennifer L. Hamann
	Executive Vice President and
	Chief Financial Officer
	(Principal Financial Officer)

By	/s/ Todd M. Rynaski
	Todd M. Rynaski
	Vice President and Controller
	(Principal Accounting Officer)


	/s/ Lance M. Fritz
	Lance M. Fritz
	Chairman, President and
	Chief Executive Officer