NGFA 116 th Annual Convention Giving Our Customers a Competitive Edge. Jack Koraleski, President and CEO March 19, 2012

Transcription

1 NGFA 116 th Annual Convention Giving Our Customers a Competitive Edge Jack Koraleski, President and CEO March 19,

2 Our Mission The men & women of Union Pacific are dedicated to serve Our Values Focus on performance Ensure high ethical standards Work as a team 2

3 2011: Record Year, Record Reputation HAMMOND SAFETY AWARD 3

4 Strength of a Unique Franchise Seattle Portland Eastport Duluth Twin Cities Oakland SLC Denver Omaha KC Chicago St. Louis LA Calexico Nogales Dallas El Paso Eagle Pass Laredo Houston Memphis New Orleans Brownsville Top producing grain states Port access Border crossings Fastest growing states 4

5 Strategy Drives the Value Proposition Safety Excellent service Efficiency Strategic investments Shareholder returns 5

6 Strategy Drives the Value Proposition Customer Value Proposition... Safety Excellent service Efficiency Strategic investments Shareholder returns Strong Relationships Innovative Products Excellent Service Strategic Investments The Best Franchise in the Industry 6

7 2011 Record Employee Safety Reportable Personal Injury Incidents Per 200,000 Man-Hours 1.86 Good

8 Reliable and Efficient Service AAR Velocity MPH 27.3 Service Delivery Index* *includes earlies Good 88 Good Shuttle Trains Turns per month Grain Car Utilization Turns per month Good Good

9 Delivering on the Value Proposition Overall Customer Satisfaction GOOD Record Year Goal 9

10 UP Invests Record Capital In Billions $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 $2.3 Capital Net Income *Includes Cash Capital, Leases and Other Non-Cash Capital $ E +/ Most capital intensive industry Return on capital drives new investment UP spends more than all but four state DOTs Invest 17-18% of revenue every year 10

11 Record 2012 Capital Plan Replacement, Growth & Productivity $3.6+ Billion in 2012 Safe and Resilient Infrastructure Increased Capacity Spending 200 New Locomotives Increased PTC Spend $1, vs Capital* ($ In Millions) $1, $1,084 $1,345 $224 $160 $ Replacement Growth & Productivity PTC *Includes cash capital, leases and other non-cash capital 11

12 Investing Heavily for Ag Over Next 4 Years PNW corridor Blair Sub double track and Missouri Valley river bridge Livonia Sub OKT siding upgrades Yermo Plant to Port service Grain covered hoppers To North Platte Fremont N Los Angeles Blair Cutoff Portland Eugene Klamath Falls Kennard Siding Eagle Pass Phase 1 Bend Blair Omaha Ft. Yermo Worth Ft. Worth San Antonio Laredo Twin Cities Spokane Omaha To Chicago Missouri Valley Eastport Nampa 2011/2012 New Sidings Brownsville / Extensions 2011/2012 Terminal Improvements Nebraska Iowa Kansas City Dallas Kansas City To Kansas City Houston St. Louis Silver Bow Shreveport Pocatello Memphis Livonia Chicago Salem Dillon New Orleans 12

13 2012 Economic Outlook Metric E Gross Domestic Product (%) (3.5) Industrial Production (%) (11.2) Light Vehicle Sales (Millions) Housing Starts (Millions) Imports (%) (13.6) Exports (%) (9.4) Unemployment (%) Source: Global Insight Mar

14 U.S. Shale Developments Inbound Drilling Materials Canadian Oil Sands Bakken Niobrara Permian Barnett Eagle Ford Industrial Sand Marcellus Haynesville Bossier Inbound drilling materials Frac sand/barites Steel /pipe Hydrochloric acid Well statistics Drilling pipe: 3-5 carloads/well Drilling materials: Vertical well 6-8 rail cars Horizontal well rail cars 14

15 U.S. Shale Developments Outbound Crude Oil Canadian Oil Sands Bakken Rail s advantage over pipeline Geographic reach Speed to market Service flexibility Niobrara Marcellus St. James terminal = UP advantage Potential Volume Growth (Carloads In Thousands) Permian Barnett Haynesville Bossier 600 Crude Sand/Minerals Pipe Eagle Ford St. James, LA

16 Working to Grow All UP Business Groups CONSUMER Consumer goods Construction materials Industrial materials Autos Plastics ENERGY Coal Ethanol Wind Turbines Shale Oil/Gas FOOD Food/Refrigerated Whole grains Grain products Fertilizer 16

17 Washington Issues Antitrust Passenger rail Positive Train Control Truck size and weight 17

18 Railroads Help America Compete Clearer roads, cleaner skies Energy independence Cost efficient Excellent customer service and value Good-paying American jobs $1 rail investment yields $3 in economic benefits 18

19 Union Pacific Committed to Agriculture Safety focus Excellent service underpins customer value Invest for growth Committed to growing our business together 19

20 NGFA 116 th Annual Convention Giving Our Customers a Competitive Edge Jack Koraleski, President and CEO March 19,