unp20230331b

unp20230331b_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2023

☐	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 incorporation or organization)	(I.R.S. Employer Identification No.)

1400 Douglas Street, Omaha, Nebraska	68179
(Address of principal executive offices)	(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.

☒ 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).

☒ 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	☑		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 Exchange Act).

☐ Yes ☒ No

As of April 14, 2023, there were 609,695,454 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 March 31, 2023 and 2022	3

	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
	For the Three Months Ended March 31, 2023 and 2022	3

	CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
	At March 31, 2023, and December 31, 2022	4

	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	For the Three Months Ended March 31, 2023 and 2022	5

	CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN COMMON SHAREHOLDERS’ EQUITY (Unaudited)
	For the Three Months Ended March 31, 2023 and 2022	6

	NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)	7

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27

Item 4.	Controls and Procedures	28

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	28

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3.	Defaults Upon Senior Securities	29

Item 4.	Mine Safety Disclosures	29

Item 5.	Other Information	29

Item 6.	Exhibits	30

Signatures		31

Certifications		32

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 March 31,	*2023*			2022
Operating revenues:
Freight revenues	$	5,656		$	5,440
Other revenues		400			420
Total operating revenues		6,056			5,860
Operating expenses:
Compensation and benefits		1,179			1,101
Fuel		766			714
Purchased services and materials		653			561
Depreciation		572			555
Equipment and other rents		235			215
Other		357			337
Total operating expenses		3,762			3,483
Operating income		2,294			2,377
Other income, net (Note 5)		184			47
Interest expense		(336	)		(307	)
Income before income taxes		2,142			2,117
Income tax expense		(512	)		(487	)
Net income	$	1,630		$	1,630
Share and Per Share (Note 6):
Earnings per share - basic	$	2.67		$	2.58
Earnings per share - diluted	$	2.67		$	2.57
Weighted average number of shares - basic		610.6			632.2
Weighted average number of shares - diluted		611.5			633.6

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Union Pacific Corporation and Subsidiary Companies

Millions, for the Three Months Ended March 31,	*2023*			2022
Net income	$	1,630		$	1,630
Other comprehensive income/(loss):
Defined benefit plans		(1	)		15
Foreign currency translation		23			21
Total other comprehensive income/(loss) [a]		22			36
Comprehensive income	$	1,652		$	1,666

[a]

Net of deferred taxes of ($0) million and ($5) million during the three months ended March 31, 2023 and 2022, 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

	*Mar. 31,*			Dec. 31,
Millions, Except Share and Per Share Amounts	*2023*			2022
Assets
Current assets:
Cash and cash equivalents	$	1,079		$	973
Short-term investments (Note 11)		-			46
Accounts receivable, net (Note 8)		1,955			1,891
Materials and supplies		728			741
Other current assets		296			301
Total current assets		4,058			3,952
Investments		2,439			2,375
Properties, net (Note 9)		56,274			56,038
Operating lease assets		1,700			1,672
Other assets		1,497			1,412
Total assets	$	65,968		$	65,449
Liabilities and Common Shareholders' Equity
Current liabilities:
Accounts payable and other current liabilities (Note 10)	$	3,617		$	3,842
Debt due within one year (Note 12)		2,592			1,678
Total current liabilities		6,209			5,520
Debt due after one year (Note 12)		31,192			31,648
Operating lease liabilities		1,233			1,300
Deferred income taxes		13,084			13,033
Other long-term liabilities		1,796			1,785
Commitments and contingencies (Note 13)
Total liabilities		53,514			53,286
Common shareholders' equity:
Common shares, $2.50 par value, 1,400,000,000 authorized; 1,112,885,415 and
1,112,623,886 issued; 609,884,944 and 612,393,321 outstanding, respectively		2,782			2,782
Paid-in-surplus		5,099			5,080
Retained earnings		59,724			58,887
Treasury stock		(54,591	)		(54,004	)
Accumulated other comprehensive loss (Note 7)		(560	)		(582	)
Total common shareholders' equity		12,454			12,163
Total liabilities and common shareholders' equity	$	65,968		$	65,449

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 Three Months Ended March 31,	*2023*			2022
Operating Activities
Net income	$	1,630		$	1,630
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		572			555
Deferred and other income taxes		52			60
Other operating activities, net		(117	)		(43	)
Changes in current assets and liabilities:
Accounts receivable, net		(59	)		(236	)
Materials and supplies		13			(105	)
Other current assets		(73	)		(43	)
Accounts payable and other current liabilities		(437	)		63
Income and other taxes		259			355
Cash provided by operating activities		1,840			2,236
Investing Activities
Capital investments		(772	)		(848	)
Maturities of short-term investments (Note 11)		46			-
Proceeds from asset sales		12			32
Other investing activities, net		(91	)		(20	)
Cash used in investing activities		(805	)		(836	)
Financing Activities
Debt issued (Note 12)		1,199			3,490
Dividends paid		(795	)		(743	)
Debt repaid		(647	)		(866	)
Share repurchase programs (Note 14)		(575	)		(2,743	)
Net issued/(paid) commercial paper (Note 12)		(102	)		(100	)
Accelerated share repurchase programs pending final settlement (Note 14)		-			(440	)
Other financing activities, net		(7	)		(51	)
Cash used in financing activities		(927	)		(1,453	)
Net change in cash, cash equivalents, and restricted cash		108			(53	)
Cash, cash equivalents, and restricted cash at beginning of year		987			983
Cash, cash equivalents, and restricted cash at end of period	$	1,095		$	930
Supplemental Cash Flow Information
Non-cash investing and financing activities:
Capital investments accrued but not yet paid	$	156		$	157
Common shares repurchased but not yet paid		15			10
Cash (paid for)/received from:
Income taxes, net of refunds	$	(35	)	$	(7	)
Interest, net of amounts capitalized		(454	)		(382	)
Reconciliation of cash, cash equivalents, and restricted cash
to the Condensed Consolidated Statement of Financial Position:
Cash and cash equivalents	$	1,079		$	909
Restricted cash equivalents in other current assets		7			17
Restricted cash equivalents in other assets		9			4
Total cash, cash equivalents and restricted cash equivalents per above	$	1,095		$	930

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 January 1, 2022		1,112.4		(473.6	)		$	2,781		$	4,979		$	55,049		$	(47,734	)	$	(914	)	$	14,161
Net income								-			-			1,630			-			-			1,630
Other comprehensive income/(loss)								-			-			-			-			36			36
Conversion, stock option exercises, forfeitures, ESPP, and other [b]		0.2		0.2				1			32			-			(28	)		-			5
Share repurchase programs (Note 14)		-		(11.0	)			-			(440	)		-			(2,753	)		-			(3,193	)
Dividends declared ($1.18 per share)		-		-				-			-			(742	)		-			-			(742	)
Balance at March 31, 2022		1,112.6		(484.4	)		$	2,782		$	4,571		$	55,937		$	(50,515	)	$	(878	)	$	11,897

Balance at January 1, 2023		1,112.6		(500.2	)		$	2,782		$	5,080		$	58,887		$	(54,004	)	$	(582	)	$	12,163
Net income								-			-			1,630			-			-			1,630
Other comprehensive income/(loss)								-

SEC Form 10-Q filed by Union Pacific Corporation