- Earnings per diluted share of $2.57
- Operating revenue up 17%
- Operating income up 19%
OMAHA,
Neb., April 21, 2022 /PRNewswire/ -- Union
Pacific Corporation (NYSE: UNP) today reported 2022
first quarter net income of $1.6
billion, or $2.57 per diluted
share. This compares to 2021 first quarter net income of
$1.3 billion, or $2.00 per diluted share.
"Union Pacific translated revenue growth from a strong economy,
our focused business development initiatives, core pricing gains,
and positive business mix, into solid financial results," said
Lance Fritz, Union Pacific chairman,
president, and chief executive officer. "Operationally, we
did not meet expectations, which is having an impact on our
customers. We are taking actions to improve resource utilization,
increase crews and locomotives where needed, and reduce freight car
inventory levels to restore fluidity."
Financial Results: Revenue Growth Drives First Quarter
Records for Operating Revenue, Operating Income, Net Income, and
Earnings Per Share
First Quarter 2022 Compared to
First Quarter 2021
- Operating revenue of $5.9 billion
was up 17% driven by higher fuel surcharge revenue, volume growth,
core pricing gains, and a positive business mix.
- Business volumes, as measured by total revenue carloads, were
up 4%.
- Union Pacific's 59.4% operating ratio improved 70 basis points.
Operating ratio included 160 basis points of positive impact from
2021 weather events. Higher fuel prices negatively impacted
the operating ratio 80 basis points.
- Operating income of $2.4 billion
was up 19%.
- The company repurchased 11.0 million shares in first quarter
2022 at an aggregate cost of $2.8
billion.
Operating Performance: Operational Inefficiencies and
Incidents Impacted Service and Productivity
First
Quarter 2022 Compared to First Quarter 2021
- Quarterly freight car velocity of 198 daily miles per car, a 5%
decline.
- Quarterly locomotive productivity was 130 gross ton-miles
(GTMs) per horsepower day, a 6% decline.
- Average maximum train length was flat.
- Quarterly workforce productivity was 1,056 car miles per
employee, a 5% improvement.
- Fuel consumption rate, measured in gallons of fuel per thousand
GTMs, was flat.
- Union Pacific's reportable personal injury rate deteriorated to
0.97 per 200,000 employee-hours compared to 0.85 for 2021.
2022 Guidance
Updated
- Operating ratio beginning with "55", up from ~55.5%
-
- Pressure from rising fuel prices and current operational
performance
Affirmed
- Full year volume growth exceeding Industrial Production
- Pricing gains in excess of inflation dollars
- Incremental margins of mid-60%
- Capital spending of $3.3
billion
- Dividend payout target of 45% of earnings
- Share repurchases in line with 2021
First Quarter 2022 Earnings Conference Call
Union Pacific will webcast its first quarter 2022 earnings
release presentation live at www.up.com/investor and via
teleconference on Thursday, April 21,
2022, at 8:45 a.m. Eastern
Time. Participants may join the conference call by dialing
877-407-8293 (or for international participants, 201-689-8349).
ABOUT UNION PACIFIC
Union Pacific (NYSE: UNP) delivers the goods families and
businesses use every day with safe, reliable, and efficient
service. Operating in 23 western states, the company connects its
customers and communities to the global economy. Trains are the
most environmentally responsible way to move freight, helping Union
Pacific protect future generations. More information about Union
Pacific is available at www.up.com.
Supplemental financial information is attached.
This news release and related materials contain statements
about the Company's future that are not statements of historical
fact, including specifically the statements regarding the Company's
expectations with respect to economic conditions and demand levels,
its ability to improve network performance (including those in
response to increased traffic), its results of operations, and
potential impacts of the COVID-19 pandemic and the Russian-Ukraine
conflict. These statements are, or will be, forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of 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
Company'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 Company'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 Company'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 Company's Annual Report on Form
10-K for 2021, which was filed with the SEC on February 4, 2022. The Company 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 Company 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 Company does update one or more forward-looking statements, no
inference should be drawn that the Company 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.
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Condensed
Consolidated Statements of Income (unaudited)
|
|
Millions, Except Per
Share Amounts and Percentages,
|
|
1st
Quarter
|
|
For the Periods
Ended March 31,
|
|
2022
|
|
|
2021
|
|
|
|
%
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight revenues
|
|
$
|
5,440
|
|
|
$
|
4,649
|
|
|
|
17
|
%
|
Other Revenues
|
|
|
420
|
|
|
|
352
|
|
|
|
19
|
|
Total operating
revenues
|
|
|
5,860
|
|
|
|
5,001
|
|
|
|
17
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
1,101
|
|
|
|
1,026
|
|
|
|
7
|
|
Fuel
|
|
|
714
|
|
|
|
411
|
|
|
|
74
|
|
Purchased services and materials
|
|
|
561
|
|
|
|
490
|
|
|
|
14
|
|
Depreciation
|
|
|
555
|
|
|
|
549
|
|
|
|
1
|
|
Equipment and other rents
|
|
|
215
|
|
|
|
212
|
|
|
|
1
|
|
Other
|
|
|
337
|
|
|
|
320
|
|
|
|
5
|
|
Total operating
expenses
|
|
|
3,483
|
|
|
|
3,008
|
|
|
|
16
|
|
Operating
Income
|
|
|
2,377
|
|
|
|
1,993
|
|
|
|
19
|
|
Other income, net
|
|
|
47
|
|
|
|
51
|
|
|
|
(8)
|
|
Interest expense
|
|
|
(307)
|
|
|
|
(290)
|
|
|
|
6
|
|
Income before income
taxes
|
|
|
2,117
|
|
|
|
1,754
|
|
|
|
21
|
|
Income taxes
|
|
|
(487)
|
|
|
|
(413)
|
|
|
|
18
|
|
Net
Income
|
|
$
|
1,630
|
|
|
$
|
1,341
|
|
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share and Per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - basic
|
|
$
|
2.58
|
|
|
$
|
2.01
|
|
|
|
28
|
%
|
Earnings per share - diluted
|
|
$
|
2.57
|
|
|
$
|
2.00
|
|
|
|
29
|
|
Weighted average number of shares - basic
|
|
|
632.2
|
|
|
|
667.6
|
|
|
|
(5)
|
|
Weighted average number of shares - diluted
|
|
|
633.6
|
|
|
|
669.2
|
|
|
|
(5)
|
|
Dividends declared per share
|
|
$
|
1.18
|
|
|
$
|
0.97
|
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Ratio
|
|
|
59.4
|
%
|
|
|
60.1
|
%
|
|
|
(0.7)
|
pts
|
Effective Tax
Rate
|
|
|
23.0
|
%
|
|
|
23.5
|
%
|
|
|
(0.5)
|
pts
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Freight Revenues
Statistics (unaudited)
|
|
|
|
1st
Quarter
|
|
For the Periods
Ended March 31,
|
|
2022
|
|
|
2021
|
|
|
|
%
|
Freight Revenues
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Grain & grain products
|
|
$
|
877
|
|
|
$
|
766
|
|
|
|
14
|
%
|
Fertilizer
|
|
|
180
|
|
|
|
170
|
|
|
|
6
|
|
Food & refrigerated
|
|
|
267
|
|
|
|
235
|
|
|
|
14
|
|
Coal & renewables
|
|
|
508
|
|
|
|
341
|
|
|
|
49
|
|
Bulk
|
|
|
1,832
|
|
|
|
1,512
|
|
|
|
21
|
|
Industrial chemicals & plastics
|
|
|
520
|
|
|
|
435
|
|
|
|
20
|
|
Metals & minerals
|
|
|
485
|
|
|
|
375
|
|
|
|
29
|
|
Forest products
|
|
|
364
|
|
|
|
316
|
|
|
|
15
|
|
Energy & specialized markets
|
|
|
552
|
|
|
|
530
|
|
|
|
4
|
|
Industrial
|
|
|
1,921
|
|
|
|
1,656
|
|
|
|
16
|
|
Automotive
|
|
|
501
|
|
|
|
447
|
|
|
|
12
|
|
Intermodal
|
|
|
1,186
|
|
|
|
1,034
|
|
|
|
15
|
|
Premium
|
|
|
1,687
|
|
|
|
1,481
|
|
|
|
14
|
|
Total
|
|
$
|
5,440
|
|
|
$
|
4,649
|
|
|
|
17
|
%
|
Revenue Carloads
(Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Grain & grain products
|
|
|
205
|
|
|
|
203
|
|
|
|
1
|
%
|
Fertilizer
|
|
|
45
|
|
|
|
44
|
|
|
|
2
|
|
Food & refrigerated
|
|
|
47
|
|
|
|
45
|
|
|
|
4
|
|
Coal & renewables
|
|
|
225
|
|
|
|
174
|
|
|
|
29
|
|
Bulk
|
|
|
522
|
|
|
|
466
|
|
|
|
12
|
|
Industrial chemicals & plastics
|
|
|
160
|
|
|
|
140
|
|
|
|
14
|
|
Metals & minerals
|
|
|
182
|
|
|
|
146
|
|
|
|
25
|
|
Forest products
|
|
|
64
|
|
|
|
60
|
|
|
|
7
|
|
Energy & specialized markets
|
|
|
131
|
|
|
|
139
|
|
|
|
(6)
|
|
Industrial
|
|
|
537
|
|
|
|
485
|
|
|
|
11
|
|
Automotive
|
|
|
190
|
|
|
|
180
|
|
|
|
6
|
|
Intermodal [a]
|
|
|
757
|
|
|
|
796
|
|
|
|
(5)
|
|
Premium
|
|
|
947
|
|
|
|
976
|
|
|
|
(3)
|
|
Total
|
|
|
2,006
|
|
|
|
1,927
|
|
|
|
4
|
%
|
Average Revenue
per Car
|
|
|
|
|
|
|
|
|
|
|
|
|
Grain & grain products
|
|
$
|
4,269
|
|
|
$
|
3,782
|
|
|
|
13
|
%
|
Fertilizer
|
|
|
4,016
|
|
|
|
3,852
|
|
|
|
4
|
|
Food & refrigerated
|
|
|
5,637
|
|
|
|
5,234
|
|
|
|
8
|
|
Coal & renewables
|
|
|
2,262
|
|
|
|
1,958
|
|
|
|
16
|
|
Bulk
|
|
|
3,508
|
|
|
|
3,246
|
|
|
|
8
|
|
Industrial chemicals & plastics
|
|
|
3,247
|
|
|
|
3,113
|
|
|
|
4
|
|
Metals & minerals
|
|
|
2,660
|
|
|
|
2,563
|
|
|
|
4
|
|
Forest products
|
|
|
5,672
|
|
|
|
5,244
|
|
|
|
8
|
|
Energy & specialized markets
|
|
|
4,219
|
|
|
|
3,828
|
|
|
|
10
|
|
Industrial
|
|
|
3,574
|
|
|
|
3,417
|
|
|
|
5
|
|
Automotive
|
|
|
2,640
|
|
|
|
2,485
|
|
|
|
6
|
|
Intermodal [a]
|
|
|
1,566
|
|
|
|
1,299
|
|
|
|
21
|
|
Premium
|
|
|
1,782
|
|
|
|
1,517
|
|
|
|
17
|
|
Average
|
|
$
|
2,711
|
|
|
$
|
2,413
|
|
|
|
12
|
%
|
[a]
|
For intermodal
shipments each container or trailer equals one carload.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Condensed
Consolidated Statements of Financial Position
(unaudited)
|
|
|
Mar.
31,
|
Dec. 31,
|
|
Millions, Except
Percentages
|
|
2022
|
|
|
2021
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
909
|
|
|
$
|
960
|
|
Short-term investments
|
|
|
46
|
|
|
|
46
|
|
Other current assets
|
|
|
2,921
|
|
|
|
2,545
|
|
Investments
|
|
|
2,279
|
|
|
|
2,241
|
|
Properties, net
|
|
|
55,064
|
|
|
|
54,871
|
|
Operating lease assets
|
|
|
1,727
|
|
|
|
1,787
|
|
Other assets
|
|
|
1,105
|
|
|
|
1,075
|
|
Total assets
|
|
$
|
64,051
|
|
|
$
|
63,525
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Common Shareholders' Equity
|
|
|
|
|
|
|
|
|
Debt due within one year
|
|
$
|
1,559
|
|
|
$
|
2,166
|
|
Other current liabilities
|
|
|
3,903
|
|
|
|
3,578
|
|
Debt due after one year
|
|
|
30,680
|
|
|
|
27,563
|
|
Operating lease liabilities
|
|
|
1,291
|
|
|
|
1,429
|
|
Deferred income taxes
|
|
|
12,739
|
|
|
|
12,675
|
|
Other long-term liabilities
|
|
|
1,982
|
|
|
|
1,953
|
|
Total
liabilities
|
|
|
52,154
|
|
|
|
49,364
|
|
Total common
shareholders' equity
|
|
|
11,897
|
|
|
|
14,161
|
|
Total liabilities and
common shareholders' equity
|
|
$
|
64,051
|
|
|
$
|
63,525
|
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Condensed
Consolidated Statements of Cash Flows
(unaudited)
|
|
Millions,
|
|
Year-to-Date
|
|
for the Periods
Ended March 31,
|
|
2022
|
|
|
2021
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
1,630
|
|
|
$
|
1,341
|
|
Depreciation
|
|
|
555
|
|
|
|
549
|
|
Deferred income taxes
|
|
|
60
|
|
|
|
54
|
|
Other - net
|
|
|
(9)
|
|
|
|
14
|
|
Cash provided by
operating activities
|
|
|
2,236
|
|
|
|
1,958
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
Capital investments*
|
|
|
(848)
|
|
|
|
(536)
|
|
Maturities of short-term investments
|
|
|
-
|
|
|
|
24
|
|
Purchases of short-term investments
|
|
|
-
|
|
|
|
(24)
|
|
Other - net
|
|
|
12
|
|
|
|
31
|
|
Cash used in investing
activities
|
|
|
(836)
|
|
|
|
(505)
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
Debt issued
|
|
|
3,490
|
|
|
|
-
|
|
Share repurchase programs
|
|
|
(2,743)
|
|
|
|
(1,347)
|
|
Debt repaid
|
|
|
(866)
|
|
|
|
(47)
|
|
Dividends paid
|
|
|
(743)
|
|
|
|
(650)
|
|
Accelerated share repurchase programs pending final
settlement
|
|
|
(440)
|
|
|
|
-
|
|
Net
issuance of commercial paper
|
|
|
(100)
|
|
|
|
(15)
|
|
Other - net
|
|
|
(51)
|
|
|
|
(14)
|
|
Cash used in financing
activities
|
|
|
(1,453)
|
|
|
|
(2,073)
|
|
Net Change in Cash,
Cash Equivalents and Restricted Cash
|
|
|
(53)
|
|
|
|
(620)
|
|
Cash, cash equivalents,
and restricted cash at beginning of year
|
|
|
983
|
|
|
|
1,818
|
|
Cash, cash equivalents,
and restricted cash at end of period
|
|
$
|
930
|
|
|
$
|
1,198
|
|
Free Cash
Flow**
|
|
|
|
|
|
|
|
|
Cash provided by operating activities
|
|
$
|
2,236
|
|
|
$
|
1,958
|
|
Cash used in investing activities
|
|
|
(836)
|
|
|
|
(505)
|
|
Dividends paid
|
|
|
(743)
|
|
|
|
(650)
|
|
Free cash
flow
|
|
$
|
657
|
|
|
$
|
803
|
|
*
|
Capital investments
include locomotive and freight car early lease buyouts of
$46 million in 2022 and $23 million in 2021.
|
|
|
**
|
Free cash flow is a
non-GAAP measure; however, we believe this measure is important to
management and investors in evaluating our financial performance
and measures our ability to generate cash without additional
external financing.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Operating and
Performance Statistics (unaudited)
|
|
|
|
1st
Quarter
|
|
For the Periods
Ended March 31,
|
|
2022
|
|
|
2021
|
|
|
|
%
|
Operating/Performance Statistics
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight car velocity (daily miles per car)
|
|
|
198
|
|
|
|
209
|
|
|
|
(5)
|
%
|
Average train speed (miles per hour) *
|
|
|
24.1
|
|
|
|
25.2
|
|
|
|
(4)
|
|
Average terminal dwell time (hours) *
|
|
|
24.0
|
|
|
|
23.5
|
|
|
|
2
|
|
Locomotive productivity (GTMs per horsepower day)
|
|
|
130
|
|
|
|
138
|
|
|
|
(6)
|
|
Gross ton-miles (GTMs) (millions)
|
|
|
209,706
|
|
|
|
193,087
|
|
|
|
9
|
|
Train length (feet)
|
|
|
9,205
|
|
|
|
9,247
|
|
|
|
-
|
|
Intermodal car trip plan compliance (%)
|
|
|
71
|
|
|
|
77
|
|
|
|
(6)
|
pts
|
Manifest/Automotive car trip plan compliance (%)
|
|
|
62
|
|
|
|
68
|
|
|
|
(6)
|
pts
|
Workforce productivity (car miles per employee)
|
|
|
1,056
|
|
|
|
1,002
|
|
|
|
5
|
|
Total employees (average)
|
|
|
30,189
|
|
|
|
29,755
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Locomotive
Fuel Statistics
|
|
|
|
|
|
|
|
|
|
|
|
|
Average fuel price per gallon consumed
|
|
$
|
2.95
|
|
|
$
|
1.85
|
|
|
|
59
|
%
|
Fuel consumed in gallons (millions)
|
|
|
234
|
|
|
|
216
|
|
|
|
8
|
|
Fuel consumption rate**
|
|
|
1.116
|
|
|
|
1.119
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
Ton-Miles (Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Grain & grain products
|
|
|
21,029
|
|
|
|
20,348
|
|
|
|
3
|
%
|
Fertilizer
|
|
|
3,151
|
|
|
|
2,995
|
|
|
|
5
|
|
Food & refrigerated
|
|
|
4,702
|
|
|
|
4,498
|
|
|
|
5
|
|
Coal & renewables
|
|
|
24,250
|
|
|
|
17,536
|
|
|
|
38
|
|
Bulk
|
|
|
53,132
|
|
|
|
45,377
|
|
|
|
17
|
|
Industrial chemicals & plastics
|
|
|
7,559
|
|
|
|
7,055
|
|
|
|
7
|
|
Metals & minerals
|
|
|
8,745
|
|
|
|
6,876
|
|
|
|
27
|
|
Forest products
|
|
|
6,625
|
|
|
|
6,318
|
|
|
|
5
|
|
Energy & specialized markets
|
|
|
9,066
|
|
|
|
9,590
|
|
|
|
(5)
|
|
Industrial
|
|
|
31,995
|
|
|
|
29,839
|
|
|
|
7
|
|
Automotive
|
|
|
4,147
|
|
|
|
3,773
|
|
|
|
10
|
|
Intermodal
|
|
|
17,918
|
|
|
|
18,375
|
|
|
|
(2)
|
|
Premium
|
|
|
22,065
|
|
|
|
22,148
|
|
|
|
-
|
|
Total
|
|
|
107,192
|
|
|
|
97,364
|
|
|
|
10
|
%
|
*
|
Surface Transportation
Board reported performance measures.
|
|
|
**
|
Fuel consumption is
computed as follows: gallons of fuel consumed divided by gross
ton-miles in thousands.
|
UNION PACIFIC
CORPORATION AND SUBSIDIARY COMPANIES
|
Non-GAAP Measures Reconciliation to
GAAP
|
|
Adjusted Debt /
Adjusted EBITDA*
|
|
|
|
|
|
Millions, Except
Ratios
|
Mar.
31,
|
Dec.
31,
|
|
for the Trailing
Twelve Months Ended [a]
|
2022
|
2021
|
|
Net income
|
$
|
6,812
|
$
|
6,523
|
|
Add:
|
|
|
|
|
|
Income tax expense/(benefit)
|
|
2,029
|
|
1,955
|
|
Depreciation
|
|
2,214
|
|
2,208
|
|
Interest expense
|
|
1,174
|
|
1,157
|
|
EBITDA
|
$
|
12,229
|
$
|
11,843
|
|
Adjustments:
|
|
|
|
|
|
Other income, net
|
|
(293)
|
|
(297)
|
|
Interest on operating lease liabilities**
|
|
51
|
|
56
|
|
Adjusted
EBITDA
|
$
|
11,987
|
$
|
11,602
|
|
Debt
|
$
|
32,239
|
$
|
29,729
|
|
Operating lease
liabilities
|
|
1,596
|
|
1,759
|
|
Unfunded/(funded)
pension and other postretirement benefits,
|
|
|
|
|
|
net of tax
cost/(benefit) of ($28) and ($21)
|
|
(92)
|
|
(72)
|
|
Adjusted
debt
|
$
|
33,743
|
$
|
31,416
|
|
Adjusted debt /
Adjusted EBITDA
|
|
2.8
|
|
2.7
|
|
[a]
|
The trailing twelve
months income statement information ended March 31, 2022, is
recalculated by taking the twelve months ended December 31, 2021,
subtracting the three months ended March 31, 2021, and adding the
three months ended March 31, 2022.
|
|
|
*
|
Total debt plus
operating lease liabilities plus after-tax unfunded pension and
other postretirement benefit obligations divided by net income
plus income tax expense, depreciation, amortization, interest
expense, and adjustments for other income and interest on operating
lease liabilities. Adjusted debt to adjusted EBITDA (earnings
before interest, taxes, depreciation, amortization, and adjustments
for other income and interest on operating lease
liabilities) is considered a non-GAAP financial measure
by SEC Regulation G and Item 10 of SEC Regulation S-K and may not
be defined and calculated by other companies in the same manner. We
believe this measure is important to management and
investors in evaluating the Company's ability to sustain given debt
levels (including leases) with the cash generated from operations.
In addition, a comparable measure is used by rating agencies when
reviewing the Company's credit rating. Adjusted debt to adjusted
EBITDA should be considered in addition to, rather than as a
substitute for, net income. The table above provides a
reconciliation from net income to adjusted debt to adjusted
EBITDA. At both March 31, 2022, and December
31, 2021, the incremental borrowing rate on operating lease
liabilities was 3.2%.
|
|
|
**
|
Represents the
hypothetical interest expense we would incur (using the incremental
borrowing rate) if the property under our operating leases were
owned or accounted for as finance leases.
|
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SOURCE Union Pacific Corporation