Union Pacific Reports Fourth Quarter and Full Year 2025 Results
OMAHA, Neb.--( BUSINESS WIRE)--Union Pacific Corporation (NYSE: UNP) today reported 2025 fourth quarter and full year results. "We had a record-breaking year and delivered best-ever safety, service, and operating results in 2025," said Jim Vena, Union Pacific Chief Executive Officer. "Our 2025 reported net income grew 6%, earnings per share increased 8%, and we improved our operating ratio. While we work through the regulatory process to create America's first transcontinental railroad, our team is focused on driving further safety, service, and operating improvements to support growth."
"We had a record-breaking year and delivered best-ever safety, service, and operating results in 2025," said Jim Vena, Union Pacific Chief Executive Officer.
Reported 2025 fourth quarter net income was $1.8 billion and diluted EPS was $3.11. Results include industrial park land sales of $234 million, increasing diluted EPS $0.30, and $30 million of merger costs, reducing diluted EPS $0.05. Adjusted fourth quarter 2025 net income* of $1.7 billion, or adjusted diluted EPS* of $2.86, compares to adjusted fourth quarter 2024 net income* of $1.8 billion, or adjusted diluted EPS* of $2.96.
Reported full year 2025 net income of $7.1 billion, or diluted EPS of $11.98, compares to full year 2024 net income of $6.7 billion, or diluted EPS of $11.09. Reported full year net income grew 6% and full year diluted EPS improved 8%. Adjusted full year 2025 net income* of $6.9 billion, or adjusted diluted EPS* of $11.66, compares to adjusted full year 2024 net income* of $6.8 billion, or adjusted diluted EPS* of $11.11. Adjusted full year net income* grew 3% and adjusted diluted EPS* improved 5%.
Fourth Quarter Summary: 2025 vs. 2024
Financial Results: Record Fourth Quarter Net Income
* See attached supplemental schedule of non-GAAP measures for a reconciliation to GAAP.
Operating Results: Best Ever Quarterly Records for Freight Car Velocity and Terminal Dwell and Record Fourth Quarter for Train Length and Workforce Productivity
Full Year Summary: 2025 vs. 2024
Financial Results: Best Ever Full Year for Freight Revenue Excluding Fuel Surcharge, Other Income, and Net Income
Operating Results: Best Ever Full Year for Safety, Freight Car Velocity, Locomotive Productivity, Terminal Dwell, Train Length, Workforce Productivity, and Fuel Consumption Rate
On Track with Investor Day Targets
* See attached supplemental schedule of non-GAAP measures for a reconciliation to GAAP.
Fourth Quarter 2025 Earnings Conference Call
Union Pacific will webcast its fourth quarter 2025 earnings release presentation live at www.up.com/investor and via teleconference on Tuesday, January 27, 2026, 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.
Certain statements in this communication are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements relate to future events or future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause the Company’s (or, as it relates to the Transaction (as defined below), the combined company of Norfolk Southern and Union Pacific (referred to hereinafter as the combined company) actual results, levels of activity, performance, or achievements or those of the railroad industry to be materially different from those expressed or implied by any forward-looking statements. In some cases, forward-looking statements may be identified by the use of words like “may,” “will,” “could,” “would,” “should,” “expect,” “anticipate,” “believe,” “project,” “estimate,” “intend,” “plan,” “pro forma,” or any variations or other comparable terminology.
While the Company has based these forward-looking statements on those expectations, assumptions, estimates, beliefs and projections they view as reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which involve factors or circumstances that are beyond the Company’s, including but not limited to, in addition to factors disclosed in the Company’s, as well as Norfolk Southern’s (as it relates to the proposed combination of it with the Company) respective filings with the U.S. Securities and Exchange Commission (the “SEC”): the occurrence of any event, change or other circumstance that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between the Company and Norfolk Southern providing for the acquisition of Norfolk Southern by Union Pacific (the “Transaction”); the risk that potential legal proceedings may be instituted against the Company or Norfolk Southern and result in significant costs of defense, indemnification or liability; the possibility that the Transaction does not close when expected or at all because required Surface Transportation Board or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Transaction); the risk that the combined company will not realize expected benefits, cost savings, accretion, synergies and/or growth from the Transaction, or that such benefits may take longer to realize or be more costly to achieve than expected, including as a result of changes in, or problems arising from, general economic and market conditions, tariffs, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which the Company and Norfolk Southern operate; disruption to the parties’ businesses as a result of the announcement and pendency of the Transaction; the costs associated with the anticipated length of time of the pendency of the Transaction, including the restrictions contained in the definitive merger agreement on the ability of the Company and Norfolk Southern, respectively, to operate their respective businesses outside the ordinary course during the pendency of the Transaction; the diversion of the Company’s and Norfolk Southern’s management’s attention and time from ongoing business operations and opportunities on merger-related matters; the risk that the integration of each party’s operations will be materially delayed or will be more costly or difficult than expected or that the parties are otherwise unable to successfully integrate each party’s businesses into the other’s businesses; the possibility that the Transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; reputational risk and potential adverse reactions of the Company’s or Norfolk Southern’s customers, suppliers, employees, labor unions or other business partners, including those resulting from the announcement or completion of the Transaction; the dilution caused by the Company’s issuance of additional shares of its common stock in connection with the consummation of the Transaction; the risk of a downgrade of the credit rating of the Company’s indebtedness, which could give rise to an obligation to redeem existing indebtedness; a material adverse change in the financial condition of the Company, Norfolk Southern or the combined company; changes in domestic or international economic, political or business conditions, including those impacting the transportation industry (including customers, employees and supply chains); the Company’s, Norfolk Southern’s and the combined company’s ability to successfully implement its respective operational, productivity, and strategic initiatives; a significant adverse event on the Company’s or Norfolk Southern’s network, including, but not limited to, a mainline accident, discharge of hazardous materials, or climate-related or other network outage; the outcome of claims, litigation, governmental proceedings and investigations involving the Company or Norfolk Southern, including, in the case of Norfolk Southern, those with respect to the Eastern Ohio incident; the nature and extent of Norfolk Southern’s environmental remediation obligations with respect to the Eastern Ohio incident; new or additional governmental regulation and/or operational changes resulting from or related to the Eastern Ohio incident; and a cybersecurity incident or other disruption to our technology infrastructure.
This list of important factors is not intended to be exhaustive. These and other important factors, including those discussed under “Risk Factors” in Norfolk Southern’s Annual Report on Form 10-K for the year ended December 31, 2024 (available at https://www.sec.gov/ix?doc=/Archives/edgar/data/0000702165/000070216525000008/nsc-20241231.htm) and Norfolk Southern’s subsequent filings with the SEC, the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 7, 2025 (available at https://www.sec.gov/ix?doc=/Archives/edgar/data/0000100885/000010088525000042/unp-20241231.htm) and the Company’s subsequent filings with the SEC, as well as the risks described in the Company’s registration statement on Form S-4 (No. 290282), as filed with the SEC on September 16, 2025, as amended on September 30, 2025 (available at https://www.sec.gov/Archives/edgar/data/100885/000119312525224307/d908896ds4a.htm), may cause actual results, performance, or achievements to differ materially from those expressed or implied by these forward-looking statements. References to the Company’s and Norfolk Southern’s 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. The forward-looking statements herein are made only as of the date they were first issued, and unless otherwise required by applicable securities laws, the Company and Norfolk Southern disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by applicable law or regulation.
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Condensed Consolidated Statements of Income (unaudited)
Millions, except per share amounts and
percentages, for the periods ended December 31,
4th Quarter
Full Year
2025
2024
%
2025
2024
%
Operating revenues
Freight revenues
$
5,759
$
5,789
(1
)%
$
23,220
$
22,811
2
%
Other revenues
326
332
(2
)
1,290
1,439
(10
)
Total operating revenues
6,085
6,121
(1
)
24,510
24,250
1
Operating expenses
Compensation and benefits
1,222
1,261
(3
)
4,897
4,899
-
Purchased services and materials
670
619
8
2,626
2,520
4
Depreciation
624
606
3
2,465
2,398
3
Fuel
595
581
2
2,390
2,474
(3
)
Equipment and other rents
229
248
(8
)
912
920
(1
)
Other
344
281
22
1,374
1,326
4
Total operating expenses
3,684
3,596
2
14,664
14,537
1
Operating income
2,401
2,525
(5
)
9,846
9,713
1
Other income, net
332
68
F
629
350
80
Interest expense
(325
)
(312
)
4
(1,309
)
(1,269
)
3
Income before income taxes
2,408
2,281
6
9,166
8,794
4
Income tax expense
(560
)
(519
)
8
(2,028
)
(2,047
)
(1
)
Net income
$
1,848
$
1,762
5
%
$
7,138
$
6,747
6
%
Share and per share
Earnings per share - basic
$
3.12
$
2.92
7
%
$
12.00
$
11.10
8
%
Earnings per share - diluted
$
3.11
$
2.91
7
$
11.98
$
11.09
8
Weighted average number of shares - basic
592.5
604.2
(2
)
595.0
607.6
(2
)
Weighted average number of shares - diluted
593.5
605.2
(2
)
595.9
608.6
(2
)
Dividends declared per share
$
1.38
$
1.34
3
$
5.44
$
5.28
3
Operating ratio
60.5
%
58.7
%
1.8 pts
59.8
%
59.9
%
(0.1) pts
Effective tax rate
23.3
%
22.8
%
0.5 pts
22.1
%
23.3
%
(1.2) pts
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Freight Revenues Statistics (unaudited)
For the Periods Ended December 31,
4th Quarter
Full Year
2025
2024
%
2025
2024
%
Freight revenues (millions)
Grain & grain products
$
1,037
$
1,061
(2
)%
$
3,926
$
3,828
3
%
Fertilizer
218
199
10
856
811
6
Food & refrigerated
233
253
(8
)
1,018
1,085
(6
)
Coal & renewables
431
351
23
1,786
1,483
20
Bulk
1,919
1,864
3
7,586
7,207
5
Industrial chemicals & plastics
612
582
5
2,512
2,345
7
Metals & minerals
543
507
7
2,193
2,081
5
Forest products
302
324
(7
)
1,290
1,326
(3
)
Energy & specialized markets
659
679
(3
)
2,609
2,688
(3
)
Industrial
2,116
2,092
1
8,604
8,440
2
Automotive
581
581
-
2,398
2,452
(2
)
Intermodal
1,143
1,252
(9
)
4,632
4,712
(2
)
Premium
1,724
1,833
(6
)
7,030
7,164
(2
)
Total
$
5,759
$
5,789
(1
)%
$
23,220
$
22,811
2
%
Revenue carloads (thousands)
Grain & grain products
235
234
-
%
880
850
4
%
Fertilizer
54
51
6
216
213
1
Food & refrigerated
36
40
(10
)
163
177
(8
)
Coal & renewables
191
175
9
797
702
14
Bulk
516
500
3
2,056
1,942
6
Industrial chemicals & plastics
176
170
4
704
672
5
Metals & minerals
189
179
6
747
719
4
Forest products
48
52
(8
)
203
213
(5
)
Energy & specialized markets
148
154
(4
)
587
607
(3
)
Industrial
561
555
1
2,241
2,211
1
Automotive
190
197
(4
)
793
824
(4
)
Intermodal [a]
806
911
(12
)
3,357
3,357
-
Premium
996
1,108
(10
)
4,150
4,181
(1
)
Total
2,073
2,163
(4
)%
8,447
8,334
1
%
Average revenue per car
Grain & grain products
$
4,414
$
4,532
(3
)%
$
4,461
$
4,505
(1
)%
Fertilizer
4,095
3,918
5
3,970
3,809
4
Food & refrigerated
6,352
6,152
3
6,233
6,104
2
Coal & renewables
2,255
2,012
12
2,241
2,113
6
Bulk
3,719
3,723
-
3,690
3,710
(1
)
Industrial chemicals & plastics
3,478
3,445
1
3,568
3,493
2
Metals & minerals
2,863
2,820
2
2,935
2,893
1
Forest products
6,387
6,210
3
6,369
6,229
2
Energy & specialized markets
4,450
4,412
1
4,446
4,426
-
Industrial
3,771
3,771
-
3,840
3,818
1
Automotive
3,065
2,952
4
3,024
2,976
2
Intermodal [a]
1,418
1,376
3
1,380
1,404
(2
)
Premium
1,731
1,656
5
1,694
1,714
(1
)
Average
$
2,778
$
2,677
4
%
$
2,749
$
2,737
-
%
[a] For intermodal shipments each container or trailer equals one carload.
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Condensed Consolidated Statements of Financial Position (unaudited)
Millions, except percentages
Dec. 31,
2025
Dec. 31,
2024
Assets
Cash and cash equivalents
$
1,266
$
1,016
Other current assets
3,289
3,005
Investments
2,885
2,664
Properties, net
59,645
58,343
Operating lease assets
1,036
1,297
Other assets*
1,577
1,390
Total assets
$
69,698
$
67,715
Liabilities and Common Shareholders' Equity
Debt due within one year
$
1,520
$
1,425
Other current liabilities
3,494
3,829
Debt due after one year
30,294
29,767
Operating lease liabilities
738
925
Deferred income taxes
13,421
13,151
Other long-term liabilities
1,764
1,728
Total liabilities
51,231
50,825
Total common shareholders' equity
18,467
16,890
Total liabilities and common shareholders' equity
$
69,698
$
67,715
Return on Average Common Shareholders' Equity
40.4
%
42.6
%
Return on Invested Capital as Adjusted (ROIC)**
16.3
%
15.8
%
Prior periods have been reclassified to conform to the current period disclosure.
ROIC is a non-GAAP measure; however, we believe this measure is important to management and investors in evaluating efficiency and effectiveness of our long-term capital investments. See page 11 for a reconciliation to GAAP.
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Condensed Consolidated Statements of Cash Flows (unaudited)
Full Year
Millions, for the periods ended December 31,
2025
2024
Operating activities
Net income
$
7,138
$
6,747
Depreciation
2,465
2,398
Deferred and other income taxes
241
28
Other - net
(554
)
173
Cash provided by operating activities
9,290
9,346
Investing activities
Capital investments*
(3,791
)
(3,452
)
Other - net
29
127
Cash used in investing activities
(3,762
)
(3,325
)
Financing activities
Dividends paid
(3,236
)
(3,213
)
Share repurchase programs
(2,679
)
(1,505
)
Debt issued
1,995
800
Debt repaid
(1,428
)
(2,226
)
Other - net
72
77
Cash used in financing activities
(5,276
)
(6,067
)
Net change in cash, cash equivalents, and restricted cash
252
(46
)
Cash, cash equivalents, and restricted cash at beginning of year
1,028
1,074
Cash, cash equivalents, and restricted cash at end of period
$
1,280
$
1,028
Free cash flow**
Cash provided by operating activities
$
9,290
$
9,346
Cash used in investing activities
(3,762
)
(3,325
)
Dividends paid
(3,236
)
(3,213
)
Free cash flow
$
2,292
$
2,808
Capital investments include locomotive and freight car early lease buyouts of $311 million in 2025 and $143 million in 2024.
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)
For the periods ended December 31,
4th Quarter
Full Year
2025
2024
%
2025
2024
%
Operating/performance statistics
Freight car velocity (daily miles per car)
239
219
9
%
225
208
8
%
Average train speed (miles per hour)*
25.5
23.9
7
24.3
23.6
3
Average terminal dwell time (hours)*
19.8
21.8
(9
)
20.9
22.6
(8
)
Locomotive productivity (GTMs per horsepower day)
141
136
4
139
135
3
Gross ton-miles (GTMs) (millions)
217,566
218,558
-
873,644
847,386
3
Train length (feet)
9,729
9,462
3
9,678
9,469
2
Intermodal service performance index (%)
100
89
11 pts
99
90
9 pts
Manifest service performance index (%)
100
96
4 pts
100
89
11 pts
Workforce productivity (car miles per employee)
1,151
1,118
3
1,132
1,062
7
Total employees (average)
28,418
29,789
(5
)
29,287
30,336
(3
)
Locomotive fuel statistics
Average fuel price per gallon consumed
$
2.49
$
2.41
3
%
$
2.49
$
2.64
(6
)%
Fuel consumed in gallons (millions)
234
236
(1
)
937
917
2
Fuel consumption rate**
1.074
1.078
-
1.072
1.082
(1
)
Revenue ton-miles (millions)
Grain & grain products
23,722
23,207
2
%
87,998
84,302
4
%
Fertilizer
3,502
3,291
6
13,780
13,204
4
Food & refrigerated
4,080
4,313
(5
)
17,888
18,547
(4
)
Coal & renewables
22,039
17,126
29
89,383
72,106
24
Bulk
53,343
47,937
11
209,049
188,159
11
Industrial chemicals & plastics
7,696
7,457
3
31,524
30,436
4
Metals & minerals
8,486
8,013
6
33,814
32,793
3
Forest products
4,957
5,369
(8
)
21,095
21,967
(4
)
Energy & specialized markets
9,960
10,690
(7
)
39,722
41,925
(5
)
Industrial
31,099
31,529
(1
)
126,155
127,121
(1
)
Automotive
4,257
4,452
(4
)
17,952
18,425
(3
)
Intermodal
17,822
20,506
(13
)
73,781
76,011
(3
)
Premium
22,079
24,958
(12
)
91,733
94,436
(3
)
Total
106,521
104,424
2
%
426,937
409,716
4
%
Surface Transportation Board (STB) 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
Condensed Consolidated Statements of Income (unaudited)
Millions,
except per share amounts and percentages,
2025
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Full Year
Operating revenues
Freight revenues
$
5,691
$
5,843
$
5,927
$
5,759
$
23,220
Other revenues
336
311
317
326
1,290
Total operating revenues
6,027
6,154
6,244
6,085
24,510
Operating expenses
Compensation and benefits
1,212
1,249
1,214
1,222
4,897
Purchased services and materials
631
642
683
670
2,626
Depreciation
610
613
618
624
2,465
Fuel
603
576
616
595
2,390
Equipment and other rents
241
230
212
229
912
Other
359
319
352
344
1,374
Total operating expenses
3,656
3,629
3,695
3,684
14,664
Operating income
2,371
2,525
2,549
2,401
9,846
Other income, net
78
123
96
332
629
Interest expense
(322
)
(335
)
(327
)
(325
)
(1,309
)
Income before income taxes
2,127
2,313
2,318
2,408
9,166
Income tax expense
(501
)
(437
)
(530
)
(560
)
(2,028
)
Net income
$
1,626
$
1,876
$
1,788
$
1,848
$
7,138
Share and per share
Earnings per share - basic
$
2.71
$
3.16
$
3.02
$
3.12
$
12.00
Earnings per share - diluted
$
2.70
$
3.15
$
3.01
$
3.11
$
11.98
Weighted average number of shares - basic
601.0
594.1
592.4
592.5
595.0
Weighted average number of shares - diluted
601.9
594.8
593.2
593.5
595.9
Dividends declared per share
$
1.34
$
1.34
$
1.38
$
1.38
$
5.44
Operating ratio
60.7
%
59.0
%
59.2
%
60.5
%
59.8
%
Effective tax rate
23.6
%
18.9
%
22.9
%
23.3
%
22.1
%
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Freight Revenue Statistics (unaudited)
2025
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Full Year
Freight revenues (millions)
Grain & grain products
$
950
$
964
$
975
$
1,037
$
3,926
Fertilizer
210
201
227
218
856
Food & refrigerated
260
267
258
233
1,018
Coal & renewables
416
469
470
431
1,786
Bulk
1,836
1,901
1,930
1,919
7,586
Industrial chemicals & plastics
607
646
647
612
2,512
Metals & minerals
521
561
568
543
2,193
Forest products
321
340
327
302
1,290
Energy & specialized markets
633
665
652
659
2,609
Industrial
2,082
2,212
2,194
2,116
8,604
Automotive
581
632
604
581
2,398
Intermodal
1,192
1,098
1,199
1,143
4,632
Premium
1,773
1,730
1,803
1,724
7,030
Total
$
5,691
$
5,843
$
5,927
$
5,759
$
23,220
Revenue carloads (thousands)
Grain & grain products
214
216
215
235
880
Fertilizer
49
55
58
54
216
Food & refrigerated
43
43
41
36
163
Coal & renewables
185
205
216
191
797
Bulk
491
519
530
516
2,056
Industrial chemicals & plastics
169
177
182
176
704
Metals & minerals
174
191
193
189
747
Forest products
51
52
52
48
203
Energy & specialized markets
143
149
147
148
587
Industrial
537
569
574
561
2,241
Automotive
195
209
199
190
793
Intermodal [a]
874
817
860
806
3,357
Premium
1,069
1,026
1,059
996
4,150
Total
2,097
2,114
2,163
2,073
8,447
Average revenue per car
Grain & grain products
$
4,434
$
4,467
$
4,532
$
4,414
$
4,461
Fertilizer
4,339
3,627
3,875
4,095
3,970
Food & refrigerated
6,058
6,237
6,306
6,352
6,233
Coal & renewables
2,250
2,283
2,181
2,255
2,241
Bulk
3,744
3,659
3,641
3,719
3,690
Industrial chemicals & plastics
3,601
3,647
3,548
3,478
3,568
Metals & minerals
2,986
2,950
2,944
2,863
2,935
Forest products
6,264
6,508
6,315
6,387
6,369
Energy & specialized markets
4,433
4,439
4,462
4,450
4,446
Industrial
3,877
3,885
3,828
3,771
3,840
Automotive
2,971
3,034
3,027
3,065
3,024
Intermodal [a]
1,364
1,345
1,393
1,418
1,380
Premium
1,658
1,688
1,701
1,731
1,694
Average
$
2,714
$
2,764
$
2,740
$
2,778
$
2,749
[a] For intermodal shipments each container or trailer equals one carload.
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Non-GAAP Measures Reconciliation to GAAP (unaudited)
Financial performance*
Millions, except per share amounts and percentages,
for the three months ended December 31, 2025
Reported
results
(GAAP)
Acquisition-
related
expense
Industrial
park land
sales
Adjusted
results
(non-GAAP)
Operating expense
$
3,684
$
(30
)
$
-
$
3,654
Operating income
2,401
30
-
2,431
Other income, net
332
-
(234
)
98
Income tax expense [a]
(560
)
-
56
(504
)
Net income
1,848
30
(178
)
1,700
Earnings per share - diluted
$
3.11
$
0.05
$
(0.30
)
$
2.86
Operating ratio
60.5
%
(0.5) pts
- pts
60.0
%
Millions, except per share amounts and percentages,
for the three months ended December 31, 2024
Reported
results
(GAAP)
Crew
staffing
agreement
Adjusted
results
(non-GAAP)
Operating expenses
$
3,596
$
(40
)
$
3,556
Operating income
2,525
40
2,565
Income tax expense
(519
)
(10
)
(529
)
Net income
1,762
30
1,792
Earnings per share - diluted
$
2.91
$
0.05
$
2.96
Operating ratio
58.7
%
(0.6) pts
58.1
%
Certain acquisition-related costs are non-deductible for income tax purposes.
The above tables reconcile our results for the three months ended December 31, 2025 and 2024, to adjust results that exclude the impact of certain items identified as affecting comparability. We use adjusted operating expenses, adjusted operating income, adjusted income tax expense, adjusted net income, adjusted diluted earnings per share (EPS), and adjusted operating ratio, as applicable, among other measures, to evaluate our actual operating performance. The measures listed in the above tables are considered non-GAAP by SEC Regulation G and Item 10 of SEC Regulation S-K. We believe these non-GAAP financial measures provide valuable information regarding earnings and business trends by excluding specific items that we believe are not indicative of our ongoing operating results of our business, providing a useful way for investors to make a comparison of our performance over time and against other companies in our industry. Since these are not measures of performance calculated in accordance with GAAP, they should be considered in addition to, rather than as a substitute for, operating expenses, operating income, income tax expense, net income, diluted EPS, and operating ratio as indicators of operating performance.
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Non-GAAP Measures Reconciliation to GAAP (unaudited)
Financial performance*
Millions, except per share amounts and percentages
Reported
results
(GAAP)
Acquisition-
related
expense
Industrial
park land
sales
Deferred
tax
adjustment
Crew
staffing
agreement
Adjusted
results
(non-GAAP)
For the year ended December 31, 2025
Operating expense
$
14,664
$
(72
)
$
-
$
-
$
(55
)
$
14,537
Operating income
9,846
72
-
-
55
9,973
Other income, net
629
-
(250
)
-
-
379
Income tax expense [a]
(2,028
)
-
60
(115
)
(13
)
(2,096
)
Net income
7,138
72
(190
)
(115
)
42
6,947
Earnings per share - diluted
$
11.98
$
0.12
$
(0.32
)
$
(0.19
)
$
0.07
$
11.66
Operating ratio
59.8
%
(0.3) pts
- pts
- pts
(0.2) pts
59.3
%
Millions, except per share amounts and percentages
Reported
results
(GAAP)
Crew
staffing
agreement
Gain on sale
of intermodal
equipment
Environmental
remediation
Adjusted
results
(non-GAAP)
For the year ended December 31, 2024
Operating expenses
$
14,537
$
(40
)
$
46
$
(23
)
$
14,520
Operating income
9,713
40
(46
)
23
9,730
Income tax expense
(2,047
)
(9
)
11
(6
)
(2,051
)
Net income
6,747
31
(35
)
17
6,760
Earnings per share - diluted
$
11.09
$
0.05
$
(0.06
)
$
0.03
$
11.11
Operating ratio
59.9
%
(0.1) pts
0.2 pts
(0.1) pts
59.9
%
Certain acquisition-related costs are non-deductible for income tax purposes.
The above tables reconcile our results for the year ended and as of December 31, 2025 and 2024, to adjust results that exclude the impact of certain items identified as affecting comparability. We use adjusted operating expenses, adjusted operating income, adjusted income tax expense, adjusted net income, adjusted diluted earnings per share (EPS), and adjusted operating ratio as applicable, among other measures, to evaluate our actual operating performance. The measures listed in the above tables are considered non-GAAP by SEC Regulation G and Item 10 of SEC Regulation S-K. We believe these non-GAAP financial measures provide valuable information regarding earnings and business trends by excluding specific items that we believe are not indicative of our ongoing operating results of our business, providing a useful way for investors to make a comparison of our performance over time and against other companies in our industry. Since these are not measures of performance calculated in accordance with GAAP, they should be considered in addition to, rather than as a substitute for, operating expenses, operating income, income tax expense, net income, diluted EPS, and operating ratio as indicators of operating performance.
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Non-GAAP Measures Reconciliation to GAAP (unaudited)
Debt / net income
Millions, except ratios
2025
2024
Debt
$
31,814
$
31,192
Net income
7,138
6,747
Debt / net income
4.5
4.6
Adjusted debt / adjusted EBITDA*
Millions, except ratios
2025
2024
Net income
$
7,138
$
6,747
Add:
Income tax expense
2,028
2,047
Depreciation
2,465
2,398
Interest expense
1,309
1,269
EBITDA
$
12,940
$
12,461
Adjustments:
Other income, net
(629
)
(350
)
Interest on operating lease liabilities [1]
40
48
Adjusted EBITDA (a)
$
12,351
$
12,159
Debt
$
31,814
$
31,192
Operating lease liabilities
1,008
1,271
Adjusted debt (b)
$
32,822
$
32,463
Adjusted debt / adjusted EBITDA (b/a)
2.7
2.7
[1]
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
Adjusted debt (total debt plus operating lease liabilities plus after-tax unfunded pension and OPEB (other post-retirement benefit) obligations) to adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and adjustments for other income and interest on present value of operating leases) 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, other information provided in accordance with GAAP. The most comparable GAAP measure is debt to net income ratio. The tables above provide reconciliations from net income to adjusted EBITDA, debt to adjusted debt, and debt to net income to adjusted debt to adjusted EBITDA. At December 31, 2025 and 2024, the incremental borrowing rate on operating leases was 4.0% and 3.8%, respectively. Pension and OPEB were funded at December 31, 2025 and 2024.
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Non-GAAP Measures Reconciliation to GAAP (unaudited)
Return on average common shareholders' equity
Millions, except percentages
2025
2024
Net income
$
7,138
$
6,747
Average equity
$
17,679
$
15,839
Return on average common shareholders' equity
40.4
%
42.6
%
Return on invested capital as adjusted (ROIC)*
Millions, except percentages
2025
2024
Net income
$
7,138
$
6,747
Interest expense
1,309
1,269
Interest on average operating lease liabilities
46
55
Taxes on interest
(299
)
(308
)
Net operating profit after taxes as adjusted
$
8,194
$
7,763
Average equity
$
17,679
$
15,839
Average debt
31,503
31,886
Average operating lease liabilities
1,140
1,436
Average invested capital as adjusted
$
50,322
$
49,161
Return on invested capital as adjusted
16.3
%
15.8
%
*
ROIC 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 efficiency and effectiveness of our long-term capital investments. In addition, we currently use ROIC as a performance criterion in determining certain elements of equity compensation for our executives. ROIC should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP. The most comparable GAAP measure is return on average common shareholders’ equity. The tables above provide reconciliations from return on average common shareholders’ equity to ROIC. At December 31, 2025 and 2024, the incremental borrowing rate on operating lease liabilities was 4.0% and 3.8%, respectively.