Bank of America Merrill Lynch 2014 Global Transportation Conference

Similar documents
J. P. Morgan Aviation, Transportation & Industrials Conference

BAML 2012 Global Transportation Conference May 17, 2012

J.P. Morgan Aviation, Transportation & Defense Conference

Citi 2013 US and European Industrials Conference

Cautionary Information

Cautionary Information

Cautionary Information

Cautionary Information

Cautionary Information

Third Quarter 2014 Earnings Release

J.P. Morgan Transportation Conference March 13, 2012

Cautionary Information

Cautionary Information

Cautionary Information

BB&T Transportation Services Conference February 15, 2012

Cautionary Information

First Quarter 2017 Results

Second Quarter 2016 Results

Fourth Quarter Earnings Release January 19, 2012

Fourth Quarter 2012 Earnings Release

Cautionary Information

Goldman Sachs Global Industrials Conference

Cautionary Information

RBC Capital Markets Transportation and Industrials Conference

Fourth Quarter 2018 Results

2008 BB&T Transportation Conference

Union Pacific Reports Record First Quarter Diluted Earnings per Share up 17 Percent

Union Pacific Reports All-Time Quarterly Records

Union Pacific Reports Best-Ever Quarterly Results

Union Pacific Reports Best-Ever Quarterly Results Diluted Earnings per Share up 13 Percent

Cautionary Information

First Quarter Earnings Release

2007 BB&T Transportation Conference

January 25, Jim Young, President & CEO

Union Pacific Reports First Quarter Results First Quarter Diluted Earnings per Share up 9 Percent

Union Pacific Reports All-Time Quarterly Records Third Quarter Diluted Earnings per Share up 23 Percent

UNION PACIFIC REPORTS THIRD QUARTER EARNINGS Sets Record Third Quarter Operating Ratio in Tough Economy. Third Quarter 2009 Highlights

UNION PACIFIC CORPORATION (Exact name of registrant as specified in its charter)

UNION PACIFIC REPORTS RECORD FOURTH QUARTER AND FULL YEAR EARNINGS. Fourth Quarter 2007 Records. Operating revenue totaled $4.2 billion, up 6 percent.

UNION PACIFIC REPORTS RECORD FIRST QUARTER Diluted Earnings per Share up 39 Percent

Union Pacific Reports Fourth Quarter and Full Year 2015 Results

UNION PACIFIC REPORTS RECORD FOURTH QUARTER AND FULL YEAR EARNINGS Operating Ratio Improves to 79.6 percent. Fourth Quarter 2006 Highlights

UNION PACIFIC CORPORATION

UNION PACIFIC REPORTS RECORD QUARTERLY EARNINGS Best-Ever Operating Income and Sub-70 Operating Ratio. All-Time Quarterly Records

Burlington Northern Santa Fe, LLC

UNION PACIFIC CORPORATION (Exact name of registrant as specified in its charter)

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

Union Pacific Reports Fourth Quarter and Full Year 2017 Results

Diluted earnings per share of $2.15 increased 43 percent. Operating ratio of 61.7 percent, flat with third quarter 2017 (see footnote 1).

UNION PACIFIC REPORTS RECORD THIRD QUARTER EARNINGS

Diluted earnings per share of $1.98 increased 37 percent. Operating income totaled $2.1 billion, up 5 percent.

Burlington Northern Santa Fe, LLC

First Quarter 2015 Financial Results April 20, 2015

Diluted earnings per share of $1.68 increased 27 percent. Operating income totaled $1.9 billion, up 8 percent.

Diluted earnings per share of $1.50 increased 10 percent. Operating income totaled $2.0 billion, up 3 percent.

UNION PACIFIC CORPORATION (Exact name of registrant as specified in its charter)

2016 Kansas City Southern KANSAS CITY SOUTHERN. Bank of America Merrill Lynch Transportation Conference

Financial Outlook. Rob Knight. Executive Vice President & Chief Financial Officer. Rob Knight EVP & Chief Financial Officer.

UNION PACIFIC CORPORATION (Exact name of registrant as specified in its charter)

Union Pacific Corporation

B a n k o f A m e r i c a M e r r i l l Ly n c h. May 16, 2013 Boston, MA. J i m Ve n a Executive Vice-President & Chief Operating Officer

Safe Harbor Statement

Kansas City Southern. Michael W. Upchurch Executive Vice President Finance & CFO. Raymond James Institutional Investors Conference March 7 th, 2016

Union Pacific Corp. Recommendation: BUY. Industrial sector Dawei Zheng. Total Annual Return Est.:

Burlington Northern Santa Fe, LLC

2016 BB&T Annual Transportation Services Conference

Second Quarter 2017 Financial Results. July 25, 2017

J.P. Morgan Aviation, Transportation & Industrials Conference

First Quarter 2011 Results. Norfolk Southern Corporation

Credit Suisse 5 th Annual Industrials Conference November 29, 2017

2018 FIRST QUARTER CSX EARNINGS CONFERENCE CALL

J.P. Morgan Aviation, Transportation & Defense Conference

Fourth Quarter Earnings Conference Call. January 27, 2016

Second Quarter 2016 Earnings Call

Second Quarter 2018 Earnings Call

Ferromex Ferrosur Florida East Coast Imex Raven Texas Pacífico. 4Q 2018 Results

Kansas City Southern Reports Second Quarter 2016

FORWARD-LOOKING STATEMENTS

INVESTING for the LONG HAUL 2018 QUARTERLY REVIEW FOURTH QUARTER

Kansas City Southern Reports Record Fourth Quarter and Full-Year 2017 Results

Fourth Quarter 2017 Earnings Call

Cowen and Company Global Transportation & Aerospace/Defense Conference. Wick Moorman Chairman and Chief Executive Officer September 3, 2014

FORWARD LOOKING STATEMENTS

2018 FOURTH QUARTER EARNINGS CONFERENCE CALL. James M. Foote President and Chief Executive Officer

Dean Foods First Quarter 2014 Earnings Report. May 8, 2014

Robert Pace CHAIRMAN OF THE BOARD

FORWARD LOOKING STATEMENTS

Evolution Petroleum Corporation Corporate Presentation August 2017 Corporate Presentation August 2017

Kansas City Southern Reports Record Fourth Quarter and Full-Year 2018 Results

3. FORWARD-LOOKING INFORMATION

In 2017, CP will continue to find opportunities to enhance the productivity, fluidity and safety of its operations.

First Quarter 2008 Earnings Conference Call

Jefferies Industrials Conference

Media Contact: William H. Galligan Phone: 816/

PHILLIPS 66 THIRD QUARTER 2018 CONFERENCE CALL. October 26,

1Q 2018 Earnings Presentation May 8, 2018 CRZO

Kansas City Southern Reports Third Quarter Results

Magellan Midstream Partners, L.P. Prepared Remarks for 2Q18 Earnings Call Thurs., Aug. 2, 2018, 12:30pm CST

Evolution Petroleum Corporation Corporate Presentation April 2018 Corporate Presentation April 2018

Evolution Petroleum Corporation Corporate Presentation March 2018 Corporate Presentation March 2018

Transcription:

Bank of America Merrill Lynch 2014 Global Transportation Conference Rob Knight, CFO May 8, 2014 1 Cautionary Information This presentation and related materials contain statements about the Corporation s future that are not statements of historical fact, including specifically the statements regarding the Corporation s expectations with respect to economic conditions and improvement, business opportunities, and its ability to improve financial performance and shareholder returns. These statements are, or will be, forward-looking statements as defined by the Securities Act of 1933 and 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 Corporation 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 Corporation 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 Corporation 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 Corporation s Annual Report on Form 10-K for 2013, which was filed with the SEC on February 7, 2014. The Corporation 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 Corporation 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 Corporation does update one or more forward-looking statements, no inference should be drawn that the Corporation 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. 2

Record Start to 2014 Positives First Quarter Records Operating Revenue Operating Income Operating Ratio Earnings Franchise Diversity Challenges Weather Conditions Earnings Per Share (First Quarter) $1.79 $2.03 +17% $2.38 1 st Qtr Record 2012 2013 2014 Operating Ratio (%) (First Quarter) 70.5 69.1-2.0 pts 67.1 1 st Qtr Record 2012 2013 2014 3 First Quarter 2014 Recap Agricultural Products Industrial Products Coal Volume Growth +7% +9% +13% Freight Revenue Mix Industrial 19% Coal 18% Intermodal 20% Agricultural 17% Autos 9% Chemicals 17% Intermodal Automotive Chemicals TOTAL +3% +2% Flat +5% Freight Revenue Performance (Year-Over-Year Change) +1% +5% +6% ARC Volume Freight Revenue 4

Network Performance Winter Weather Impact & Recovery Efforts 26.3 26.4 UP Velocity (As reported to the AAR, in mph) 24.5 27.6 Good 24.6 23.9 23.5 24.4 Good 26.4 UP Terminal Dwell (As reported to the AAR, in hours) 27.4 30.7 35.7 29.9 30.7 30.4 29.4 1Q12 1Q13 1Q14 1 5 9 13 18 1Q12 1Q13 1Q14 1 5 9 13 18 2014 Weekly Trend 2014 Weekly Trend % Increase Northern Region Train Delay Hours Increase vs. Week Ending Jan. 1, 2014 300% 200% 100% 0% Jan-14 Feb-14 Mar-14 Apr-14 May-14 Agility & Resource Readiness Leverage UP Franchise Adjust transportation plans Leverage fluid routes and terminals Resource agility & surge capacity Maximize windows of opportunity 5 2014 YTD Volume Drivers 210 200 190 180 170 160 150 7-Day Monthly Carloadings (000s) 2014 YTD up 6%* 2006 @192 2013 @ 176 2011 @176.5 2012 @ 176 2010 @172 2009 @ 152 2014 YTD Volume Growth* (vs 2013) Agricultural Products Industrial Products Coal Intermodal Automotive +6% +6% +4% +10% +14% 140 January December Chemicals TOTAL -1% +6% *Through May 6, 2014 6

Agricultural Trends 2013 Volume Mix Grain Products 35% Food & Refrigerated 26% Grain (Year-over-Year Volume Change) Domestic* Export* 93% 73% Grain 39% 1% 0% 15% 9,000 7,500 6,000 4,500 3,000 AAR Weekly Grain Carloads (UNP) 2014* 2013 2012 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 *Through May 3, 2014-18%-20% -17% -14% -34% 1Q13 2Q13 3Q13 4Q13 1Q14 *Excludes equipment shipments. Ag Domestic & International 2013 Volume Mix Domestic Ag 71% Export Grain 15% Meals & Oils, 5% Import Beer, 4% Feed & Animal Protein, 2% Frozen Meat & Poultry, 1% Other Int l, 2% 7 Coal Trends 45,000 40,000 35,000 30,000 25,000 2014* Volume Trends (Weekly Carloadings) 1Q Other 13% Demand from Cold Weather Low Coal Inventories Legacy Contract Loss Exports *Through May 3, 2014 Southern Powder River Basin 74% 2Q WY Blizzard 3Q 2012 2013 4Q 11,388 Electricity Generation* Total U.S. Electrical Generation (thousand megawatt hrs/day) -3% 11,102 2007 2008 2009 2010 2011 2012 2013 +3% 2013 2014 Thru Week 17 *U.S. Energy Information Administration (EIA), Edison Electric Institute Electricity Generation Market Share* 50% 50% 48% 48% % from coal 47% 17% 20% 19% 21% 20% Apr 12: 32% 38% % from natural gas 40% 27% 25% 2007 2009 2011 2013 *U.S. Energy Information Administration (EIA) through March 2014 40% 24% 8

Shale-Related Volumes Shale-Related Volumes (000s) 1Q 2014 Vol % Inc Frac Sand* 54.8 22 Crude Oil 37.6-18 Pipe 7.7 6 Brl $ $120 $110 $100 Crude Oil Prices Brent LLS WTI ~4.5% of Total Volumes $90 Quarterly Shale Carloads (000s) Pipe Crude Oil Frac Sand* 22.0 33.7 40.5 41.3 45.6 46.9 38.5 32.1 37.6 38.8 39.9 37.7 37.7 44.8 49.5 47.9 51.3 54.8 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2012 2013 2014 *Includes barites $80 Jan 2013 Aug 2013 May 2014* Additional pipeline capacity impacting short-haul Texas & Oklahoma shipments Spread differentials displace Gulf Coast shipments to East Coast *Through May 6, 2014 9 Housing Trends Housing represents ~ 8-9% of current UP volumes Lumber, Stone & Glass down 2,500 carloads a week Housing also drives appliances, roofing, rebar, aggregates, and cement demand Including IP, Chemicals & Intermodal, return to normal could add volume growth opportunity of 4-5% UP Wkly Carloadings 12,000 10,000 8,000 6,000 4,000 2,000 Lumber, Stone & Glass 2014 YTD* Lumber up 5% 2013 FY Lumber up 10% Housing Starts (mils) 0 04 05 07 09 11 13 15 17 2.5 2.0 1.5 1.0 0.5 0.0 *Through May 3, 2014 Apr 2014 IHS Global Insight forecast 10

Expanding Chemical Franchise Texas/Louisiana Investments Chevron Phillips Chemical Co. $5 Billion investment in cracker & additional capacity projects. Ft. Worth Total capacity: 1.5 million mt/year Estimated completion in 2017 Dallas Investment Announcements Total Over $10 Billion Shreveport Formosa Plastics Corp. >$1.7 Billion investment in cracker San and additional capacity projects. Antonio Cracker capacity: 800,000 mt/year Estimated completion in 2017 Gruppo Mossi & Ghisolfi Investment in new PET & PTA plants. Capacity: 1.0 & 1.2 million mt/year Estimated completion in 2016 Existing Plants New Plant/Expansions Houston Brownsville New Orleans Exxon Mobil Corp. Investment in steam cracker. Total capacity: 1.5 million mt/year Estimated completion in 2016 Dow Chemical Co. $1.7 Billion investment in cracker and additional capacity projects. Total capacity: 1.5 million mt/year Estimated completion in 2017 Source: Public Announcements 11 Highway Conversions Comprehensive Network Significant Domestic Truck-Load Conversion Opportunity Truckload Opportunity Originating from Mexico Strong Value Proposition Competitive Service at an Affordable Price Environmental Friendliness Truck s Traditional Advantage is Eroding Regulations & Rising Costs Highway Congestion & Infrastructure Flat 8% Volume Growth (Qtr-over-Qtr Volume Growth) Domestic International 3% -8% 4% -5% 5% 8% -1% -1% 1Q13 2Q13 3Q13 4Q13 1Q14 Domestic Volume Growth (Units in 000 s) 1,159 1,251 +36% 1,452 1,475 1,526 1,575 2008 2009 2010 2011 2012 2013 12

Investments Support Intermodal Growth Santa Teresa, NM Supports Sunset Route from LA to El Paso Close proximity to Maquiladoras in Northern Mexico Strategic focal point for freight moving across the U.S. and the border 13 UP Positioned for Mexico Growth Opportunities Strong Investments Foreign and Domestic 708 Volume Growth (Carloads in Thousands) 764 776 743 600 +3% +5% 882 +9% 857 817 750 '05 '06 '07 '08 '09 '10 '11 '12 '13 2013 Business Mix (In Carloads) UP Interchange Points Ports Ferromex (FXE) KCSM Ferrosur (FSRR) New Industrial Investment Agricultural 12% Industrial 11% Autos 47% Intermodal 23% Chemicals 6% Coal 1% 14

Strengthening the Franchise Replacement, Growth & Productivity, and PTC Safe and Resilient Infrastructure ~$3.9B 2014 Capital Plan* (in Millions) Continued Capacity Spending Southern Region Network Strategies ~ 200 New Locomotives Equipment Purchases Increased PTC Spending Capital Spend of 16% - 17% of Revenue for 2013-2017 PTC $450 Capacity/ Commercial Facilities $680 Technology/ Other $200 Infrastructure Replacement $1,725 Locomotives/ Equipment $845 * Includes cash capital, leases and other non-cash capital. 15 Strong Financial Position Three Month Period Ending March 31 ($ In Millions) $1,524 $1,767 Cash from Ops Free Cash Flow* ($800) ($905) Investing ($323) ($363) 2013 2014 2013 2014 2013 2014 $12,804 Total Debt* (Adjusted) $13,276 37.6% 38.4% 12/31/2013 3/31/2014 Adjusted Debt to Capital Dividends Solid Cash from Operations Increase in Capital Investment 32% Increase in Declared Dividends to $0.91 per Share Strong Balance Sheet Investment Grade Credit Rating $1 Billion Debt Issuance in Jan 14 2014 Year-End Targets: ~40% Adj. Debt-to-Cap ~1.5x Adj. Debt / Adj. EBITDA * See Union Pacific website under Investors for a reconciliation to GAAP. 16

Delivering Value to Shareholders 17.5 3Q 2007 Declared Dividend Per Share (cents) 47.5 38 60 +5x 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2011 2012 2013 14 Cumulative Share Repurchases 69 ($ In Billions) 79 $9.3 $10.0 91 Dividends: Declared Dividend increase in 3Q13 & 1Q14 Dividend Payout Target Range of 30% to 35% on a declared basis Achieved Payout Ratio of 31.5% in 2013 Share Repurchases: Continue Opportunistic Buying Approach New 4-year Share Repurchase, 60M shrs (effective January 1, 2014) Future Allocation $7.1 $3.0 $3.0 $4.2 $5.7 $1.5 2007 2008 2009 2010 2011 2012 2013 1Q14 17 2014 Outlook Agricultural Products + Strong Exports? Weather / 2014 Crop? California Drought Automotive + Auto Sales Recovery Continues Chemicals + Most Markets Remain Solid - Crude Oil Spreads Coal + Low Coal Inventories? Weather Industrial Products + Shale Drilling - Frac Sand + Housing & Construction Intermodal + Domestic Highway Conversions + International 18

Question & Answer Session Rob Knight, CFO May 8, 2014 19