(Source: Union Pacific Railroad press release, January 20, 2022)
OMAHA, Neb. — Union Pacific Corporation today reported 2021 fourth quarter net income of $1.7 billion, or $2.66 per diluted share. This compares to adjusted 2020 fourth quarter net income of $1.6 billion, or $2.36 per diluted share. The 2020 adjusted results exclude a $278 million pre-tax, non-cash impairment charge.
Reported net income for the full year 2021 was $6.5 billion, or $9.95 per diluted share. These full year results compare to adjusted full year 2020 net income of $5.6 billion, or $8.19 per diluted share, which excludes the impairment charge.
“The Union Pacific team concluded its most profitable year ever in 2021. We produced double digit fourth quarter revenue growth by leveraging our great rail franchise to generate positive business mix and core pricing gains, despite ongoing global supply chain challenges that impacted volumes,” said Lance Fritz, Union Pacific chairman, president and chief executive officer. “For the third consecutive year we improved our fuel consumption rate, taking steps to reduce our carbon footprint and meet the goals of our 2021 Climate Action Plan. While our safety and operational performance in 2021 did not meet expectations, we look to convert recent progress into sustained improvement in 2022. Although uncertainty remains around COVID variants and supply chain disruptions, we see a positive demand environment in 2022 and continued traction from business development efforts driving growth as we deliver value to all our stakeholders.”
Fourth Quarter Summary
Financial Results: Strong Revenue Growth Drives Fourth Quarter Records for Operating Income, Net Income, and Earnings Per Share
Fourth Quarter 2021 Compared to Adjusted Fourth Quarter 2020*
- Operating revenue of$5.7 billionwas up 12% driven by higher fuel surcharge revenue, a positive business mix, and core pricing gains, partially offset by lower volumes.
- Business volumes, as measured by total revenue carloads, were down 4%.
- Union Pacific’s 57.4% operating ratio deteriorated 180 basis points. Higher fuel prices negatively impacted the operating ratio 100 basis points.
- Operating Income of$2.4 billionwas up 7%.
- The company repurchased 5.8 million shares in fourth quarter 2021 at an aggregate cost of$1.4 billion.
(* — 2020 results exclude the Brazos non-cash impairment charge. Please reference page 10 of the supplemental financial information for the reconciliation to GAAP.)
Operating Performance: Network Recovery Efforts Slowed by COVID Impacts to Crew Availability
Fourth Quarter 2021 Compared to Fourth Quarter 2020
- Quarterly freight car velocity of 197 daily miles per car, a 12% decline.
- Quarterly locomotive productivity was 129 gross ton-miles (GTMs) per horsepower day, a 9% decline.
- Average maximum train length was 9,319 feet, a 2% increase.
- Quarterly workforce productivity was 1,046 car miles per employee, a 1% improvement
- Fuel consumption rate, measured in gallons of fuel per thousand GTMs, was flat.
2021 Full Year Summary
Financial Results: Revenue Growth and Margin Improvement Drives Records for Operating Income, Operating Ratio, Net Income, and Earnings Per Share
Full Year 2021 Compared to Adjusted Full Year 2020*
- Operating revenue of$21.8 billionwas up 12% driven by volume growth, higher fuel surcharge revenue, core pricing gains, and a positive business mix.
- Business volumes, as measured by total revenue carloads, were up 4%.
- Union Pacific’s 57.2% operating ratio improved 130 basis points. Higher fuel prices negatively impacted the operating ratio by 140 basis points.
- Operating Income of$9.3 billionwas up 15%.
- Union Pacific’s capital program in 2021 totaled$3.0 billion.
- The company repurchased 33.3 million shares in 2021 at an aggregate cost of$7.3 billion.
(* — 2020 results exclude the Brazos non-cash impairment charge. Please reference page 10 of the supplemental financial information for the reconciliation to GAAP.)
Operating Performance: Network Operations Challenged by Weather Events, Wildfires, COVID Impacted Crew Availability, and Supply Chain Disruptions
Full Year 2021 Compared to Full Year 2020
- Union Pacific’s reportable personal injury rate deteriorated to 0.98 per 200,000 employee-hours compared to 0.90 for full year 2020.
- Freight car velocity of 203 daily miles per car, an 8% decline.
- Locomotive productivity was 133 GTMs per horsepower day, a 3% decline.
- Average maximum train length was 9,334 feet, a 6% increase.
- Workforce productivity was 1,038 car miles per employee, a 10% improvement.
- Fuel consumption rate, measured in gallons of fuel per thousand GTMs, improved 1%.