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Union Pacific Reports 4Q Net Income of $1 Billion, Up From $964 Million in 4Q 2011; And Full Year Net Income of $3.9 Billion

Date Posted: January 24, 2013

Omaha, NE—Union Pacific Corporation (NYSE: UNP) reported Jan. 24 2012 fourth quarter net income of $1 billion, or $2.19 per diluted share, compared to $964 million, or $1.99 per diluted share, in the fourth quarter 2011.

"Our diverse portfolio of business, solid core pricing gains, and efficient network operations drove these results despite significantly weaker coal and grain markets," said Jack Koraleski, Union Pacific chief executive officer.

"Although it was a challenging year on many fronts, 2012 was Union Pacific's most profitable year in our 150-year history.

"It's a testament to the strength and diversity of our franchise, the dedication and commitment of our employees, and our unrelenting focus on creating value for our customers."

Fourth Quarter Summary

Fourth quarter business volumes, as measured by total revenue carloads, were down 2 percent compared to 2011. Volume declines in coal and agricultural products more than offset growth in chemicals, automotive and intermodal shipments.

Volumes for industrial products were flat versus 2011.

Quarterly operating revenue increased 3 percent in the fourth quarter 2012 to $5.25 billion versus $5.1 billion in the fourth quarter 2011.

In addition:

• Quarterly freight revenue increased 2 percent compared to the fourth quarter 2011, mainly driven by core pricing gains and fuel surcharge recoveries.

• Union Pacific's operating ratio of 67.1 percent was a fourth quarter record, 1.2 points better than the fourth quarter 2011.

• Average quarterly diesel fuel prices increased 3 percent to $3.25 per gallon in the fourth quarter 2012 compared to $3.16 per gallon in the fourth quarter 2011.

• The Customer Satisfaction Index of 93 set a fourth quarter record, 1 point better than the fourth quarter 2011.

• Quarterly train speed, as reported to the Association of American Railroads, was 26.7 mph, up 4 percent from the fourth quarter 2011.

• The Company repurchased 2.0 million shares in the fourth quarter 2012 at an average share price of $121.81 and an aggregate cost of $248 million.

Summary of Fourth Quarter Freight Revenues

• Chemicals up 15 percent

• Automotive up 14 percent

• Intermodal up 6 percent

• Industrial Products up 3 percent

• Coal down 7 percent

• Agricultural down 8 percent

2012 Full Year Summary

For the full year 2012, Union Pacific reported net income of $3.9 billion or $8.27 per diluted share.

This compares to $3.3 billion or $6.72 per diluted share in 2011, 20 and 23 percent increases, respectively.

Operating revenue totaled a record $20.9 billion versus $19.6 billion in 2011.

Operating income increased 18 percent to $6.7 billion, up from $5.7 billion in 2011.

• Four of the six business groups reported freight revenue and volume growth in 2012. Freight revenue grew 6 percent to $19.7 billion compared to $18.5 billion in 2011. Carloadings were flat versus 2011.

• UP's operating ratio in 2012 was 67.8 percent, improving 2.9 points compared to 2011.

• Average diesel fuel prices increased 3 percent to $3.22 per gallon in 2012 from $3.12 per gallon in 2011.

• The Company increased its quarterly dividend per share by 15 percent to $0.69 cents per share. Total dividends declared for the full year 2012 grew 29 percent compared to the full year 2011.

• The Company repurchased more than 12.8 million shares in 2012 at an average share price of $115.01, and an aggregate cost of $1.5 billion.

2013 Outlook

"For 2013, we're expecting to see many of the same challenges we faced last year," Koraleski said.

"We'll also be watching to see what happens in Washington and how it impacts potential economic growth.

"That said, we successfully navigated through the complexities of 2012, and we'll continue to follow that same strategy going forward.

"We'll remain agile and leverage the strengths of our diverse franchise with a focus on creating value for our customers and generating strong returns for our shareholders again in 2013."

For more information, call 402-544-3753.

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