Core Insights - Union Pacific Corporation (NYSE: UNP) is highlighted as a strong investment opportunity, particularly noted for its dividend growth potential [1]. Company Overview - Union Pacific is recognized as one of the first five dividend growth stocks purchased by the analyst in 2020, indicating a long-term positive outlook on the company's performance [1]. Investment Thesis - The article emphasizes the potential of Union Pacific as one of the best investments currently available, suggesting a favorable market position and growth prospects [1].

Core Viewpoint - Union Pacific Corporation (NYSE: UNP) is highlighted as a potentially strong investment opportunity, particularly due to its status as a dividend growth stock since 2020 [1]. Group 1 - Union Pacific has been frequently mentioned as a favorable investment choice in 2023 [1]. - The company was one of the first five dividend growth stocks acquired by the analyst in 2020, indicating a long-term positive outlook [1].

Core Insights - Union Pacific Corporation (UNP) reported third-quarter 2025 earnings of $3.08 per share, exceeding the Zacks Consensus Estimate of $2.99, marking a 12% year-over-year improvement due to strong operational efficiency [1][9] - Operating revenues reached $6.2 billion, surpassing the Zacks Consensus Estimate by 0.2% and reflecting a 2.5% year-over-year increase driven by solid core pricing gains [1][9] Financial Performance - Freight revenues, which constitute 95% of total revenues, increased by 3% to $5.93 billion, exceeding the estimate of $5.87 billion [2] - Total operating expenses rose by 1% year over year to $3.7 billion, with fuel expenses up by 1% and purchased services and materials expenses increasing by 6% [3] - Operating income improved by 6% year over year to $2.55 billion, while the operating ratio improved by 180 basis points to 58.5% [3][9] Segment Performance - Bulk freight revenues increased by 7% year over year to $1.93 billion, outperforming the projected increase of 3.8% [4] - Industrial freight revenues rose by 3% to $2.19 billion, slightly below the expected increase of 4.1% [5] - Premium freight revenues decreased by 2% to $1.8 billion, aligning with the anticipated decline of 3% [5] Liquidity and Debt - Union Pacific ended the third quarter of 2025 with cash and cash equivalents of $808 million, down from $1 billion at the end of 2024 [6] - Debt increased to $30.29 billion from $29.77 billion at the end of 2024 [6]

Core Insights - Union Pacific reported $6.24 billion in revenue for Q3 2025, a 2.5% year-over-year increase, with an EPS of $3.08 compared to $2.75 a year ago, exceeding Zacks Consensus Estimates for both revenue and EPS [1] Financial Performance - The reported revenue of $6.24 billion surpassed the Zacks Consensus Estimate of $6.23 billion, resulting in a surprise of +0.16% [1] - EPS of $3.08 represented a surprise of +3.01% against the consensus estimate of $2.99 [1] - Operating Ratio was reported at 59.2%, slightly above the four-analyst average estimate of 59% [4] - Total Revenue Ton-Miles reached 108.86 billion, exceeding the average estimate of 106.18 billion [4] - Total Revenue Carloads were 2.16 million, slightly below the average estimate of 2.17 million [4] Revenue Breakdown - Freight Revenues from Bulk were $1.93 billion, a +6.9% change year-over-year, exceeding the average estimate of $1.92 billion [4] - Freight Revenues from Industrial Products were $2.19 billion, a +3.4% change year-over-year, below the average estimate of $2.23 billion [4] - Freight Revenues from Premium were $1.8 billion, a -2.1% change year-over-year, exceeding the average estimate of $1.76 billion [4] - Operating Revenues from Freight were $5.93 billion, a +2.8% year-over-year change, slightly above the average estimate of $5.91 billion [4] - Freight Revenues from Energy & Specialized Markets were $652 million, a -3% change year-over-year, below the average estimate of $714.03 million [4] - Freight Revenues from Intermodal were $1.2 billion, a -3.4% change year-over-year, exceeding the average estimate of $1.16 billion [4] Stock Performance - Union Pacific shares returned -2.2% over the past month, while the Zacks S&P 500 composite saw a +0.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1 - The company reported a profit beat in the third quarter [3] - There was an improvement in the operating ratio of more than 100 basis points [3] - The slight revenue miss was overshadowed by the profit beat and operating ratio improvement [3]

Core Insights - Union Pacific (UNP) reported quarterly earnings of $3.08 per share, exceeding the Zacks Consensus Estimate of $2.99 per share, and up from $2.75 per share a year ago, representing an earnings surprise of +3.01% [1][2] - The company generated revenues of $6.24 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.16% and showing an increase from $6.09 billion year-over-year [2] - Union Pacific has outperformed consensus EPS estimates three times over the last four quarters and has topped revenue estimates twice in the same period [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.04 on revenues of $6.24 billion, while for the current fiscal year, the estimate is $11.74 on revenues of $24.66 billion [7] - The estimate revisions trend for Union Pacific was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Transportation - Rail industry, to which Union Pacific belongs, is currently in the bottom 10% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Union Pacific reported third quarter 2025 earnings per share of $3.01, with adjusted earnings per share of $3.08, reflecting a 12% increase year-over-year [3][8] - Operating revenue reached $6.2 billion, a 3% increase compared to the previous year, while freight revenue totaled $5.9 billion, also up 3% [5][8] - The adjusted operating ratio improved by 180 basis points to 58.5% [3][8] - Cash from operations totaled $7.1 billion, up 6% year-over-year, with a cash balance of over $800 million [9] Business Line Data and Key Metrics Changes - Bulk segment revenue increased by 7% on a 7% volume increase, driven by strong coal demand and export wheat shipments [13] - Industrial segment revenue rose by 3% with a corresponding volume increase, while premium revenue declined by 2% due to a 5% decrease in volume [14] - Intermodal volumes faced challenges, with a 17% decrease in international volume, although domestic segments achieved record-breaking volumes [15][16] Market Data and Key Metrics Changes - The company noted softer economic indicators such as automotive sales and housing starts, impacting overall market conditions [10] - International intermodal volumes are expected to decline further, reflecting tough comparisons against last year's strong growth [11] Company Strategy and Development Direction - The company is focused on executing its strategy to drive operational efficiencies and improve service reliability [3][10] - Union Pacific aims to achieve high single to low double-digit growth in earnings per share over the next three years, reaffirming its commitment to accretive pricing and industry-leading operating ratios [11][12] - The merger with Norfolk Southern Corporation is positioned as a strategic move to enhance competition and service offerings [25][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the operating environment but expressed confidence in achieving solid results despite a decline in volumes [10][11] - The team is committed to maintaining high service levels and operational excellence, which are seen as critical for future growth [19][20] - The company anticipates continued strength in bulk and industrial segments, while facing headwinds in international volumes and automotive markets [16][18] Other Important Information - The company has paused its share repurchase program to prioritize debt reduction, having paid down $1 billion in long-term notes during the quarter [9] - Union Pacific has maintained its commitment to providing annual dividend raises for 19 consecutive years [9] Q&A Session Summary Question: Thoughts on merger application and support from shippers and unions - Management provided a comprehensive overview of the merger process, emphasizing the importance of high service levels and financial stability as foundations for the merger [28][30] - The company has secured support from over 400 customers, indicating strong backing for the merger [36] Question: Sequential operating ratio and fourth quarter expectations - Management refrained from providing specific guidance but discussed the challenges posed by declining volumes and merger costs [39][42] Question: Competitors collaborating more since merger announcement - Management viewed competitor collaboration as a validation of Union Pacific's competitive position and expressed confidence in the merger's benefits for customers [48][49] Question: Productivity and efficiency amid weaker volumes - Management assured that they would not sacrifice service quality and would adjust resources as necessary to maintain productivity [54][56] Question: Opposition from BNSF regarding the merger - Management downplayed the significance of opposition from BNSF, asserting that the merger would enhance competition and benefit customers [60][62] Question: Pricing environment and future expectations - Management indicated that while the pricing environment remains challenging, they expect to continue yielding positive pricing results driven by service improvements [68][70]

Financial Performance - Union Pacific's reported operating income for the third quarter of 2025 was $2.5 billion, a 6% increase compared to the third quarter of 2024[13] - The adjusted operating income was $2.6 billion, a 7% increase compared to the same period[13] - The reported operating ratio was 59.2%, a 1.1 percentage point improvement compared to the third quarter of 2024[13] - The adjusted operating ratio was 58.5%, a 1.8 percentage point improvement[13] - Net income was reported at $1.8 billion, a 7% increase year-over-year, while adjusted net income also stood at $1.8 billion, reflecting a 9% increase[13] - Reported earnings per share (EPS) was $3.01, a 9% increase, and adjusted EPS was $3.08, a 12% increase compared to the third quarter of 2024[13] Revenue and Volume - Total freight revenue reached $5.927 billion, a 3% increase compared to the third quarter of 2024[17] - Bulk commodity revenue was $1.930 billion, a 7% increase compared to the third quarter of 2024, with a volume of 530 thousand, also a 7% increase[31] - Industrial commodity revenue was $2.194 billion, a 3% increase, with a volume of 574 thousand, also a 3% increase[31] - Premium commodity revenue was $1.803 billion, a 2% increase, with a volume of 1059 thousand, a 5% increase[31] Cash Flow and Capital Allocation - Union Pacific generated $7.1 billion in cash from operations year-to-date[22] - The company returned $5.1 billion to shareholders[26] - Free cash flow was $1.9 billion[26] - The company's capital plan includes $3.4 billion in investments[25]

Union Pacific reported a 9% rise in third-quarter profit on Thursday, powered by strong pricing. ...

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) This section provides a concise overview of Union Pacific's Q3 2025 financial and operational performance, strategic direction, and future outlook [Third Quarter 2025 Financial Highlights](index=1&type=section&id=1.1%20Third%20Quarter%202025%20Financial%20Highlights) Union Pacific reported strong financial results for Q3 2025, with net income increasing by 7% and diluted EPS by 9% year-over-year. Operating revenue grew 3%, driven by core pricing gains, and the operating ratio improved significantly by 110 basis points Third Quarter 2025 Key Financials (vs Q3 2024) | Metric | Q3 2025 (GAAP) | Q3 2024 (GAAP) | Change (%) | Change (bps) | | :---------------------- | :------------- | :------------- | :--------- | :----------- | | Net Income | $1.8 billion | $1.7 billion | 7% | - | | Diluted EPS | $3.01 | $2.75 | 9% | - | | Adjusted Diluted EPS | $3.08 | - | - | - | | Operating Revenue | $6.2 billion | $6.091 billion | 3% | - | | Freight Revenue (excl. fuel surcharge) | - | - | 4% | - | | Operating Ratio (OR) | 59.2% | 60.3% | - | (110) | | Adjusted OR | 58.5% | - | - | (180) | [Third Quarter 2025 Operational Highlights](index=1&type=section&id=1.2%20Third%20Quarter%202025%20Operational%20Highlights) The company achieved record operational efficiency in Q3 2025, with improvements across key metrics such as freight car velocity, locomotive productivity, terminal dwell time, and workforce productivity, alongside improved safety rates Third Quarter 2025 Key Operational Metrics (vs Q3 2024) | Metric | Q3 2025 | Q3 2024 | Change (%) | | :-------------------------- | :------ | :------ | :--------- | | Reportable personal injury rate | Improved | - | - | | Reportable derailment rate | Improved | - | - | | Freight car velocity (daily miles/car) | 226 | 210 | 8% | | Locomotive productivity (GTMs/horsepower day) | 140 | 135 | 4% | | Average terminal dwell (hours) | 20.4 | 22.4 | (9)% | | Average train length (feet) | 9,801 | 9,580 | 2% | | Workforce productivity (car miles/employee) | 1,165 | 1,102 | 6% | [CEO Statement & Strategic Direction](index=1&type=section&id=1.3%20CEO%20Statement%20%26%20Strategic%20Direction) CEO Jim Vena highlighted the successful execution of the company's strategy, emphasizing the historic opportunity presented by the merger with Norfolk Southern to create the first transcontinental railroad in America. The team remains focused on driving continuous improvements while working towards regulatory approval - CEO Jim Vena stated that Q3 results prove successful strategy execution and highlighted the historic opportunity with Norfolk Southern to create America's first transcontinental railroad[3](index=3&type=chunk) - The company's team is focused on driving continued improvements in pursuit of what's possible, while working towards regulatory approval for the merger[3](index=3&type=chunk) [2025 Outlook & Investor Day Targets](index=2&type=section&id=1.4%202025%20Outlook%20%26%20Investor%20Day%20Targets) Union Pacific is on track with its Investor Day targets, projecting strong service, accretive pricing, and EPS growth consistent with its high-single to low-double digit 3-year CAGR target. The company aims for an industry-leading operating ratio and return on invested capital, with continued strong cash generation, a $3.4 billion capital plan, and a 3% dividend increase, though share repurchases are paused due to the Norfolk Southern merger - The company is on track with Investor Day targets, focusing on meeting customer demand with strong service and achieving EPS growth consistent with a high-single to low-double digit 3-year CAGR target[7](index=7&type=chunk)[11](index=11&type=chunk) - Key financial goals for 2025 include pricing dollars accretive to operating ratio, industry-leading operating ratio and return on invested capital, and continued strong cash generation[11](index=11&type=chunk) - Capital allocation plans include a **$3.4 billion capital plan**, a **3% dividend increase** in Q3 2025, and a pause on share repurchases due to the Norfolk Southern merger[11](index=11&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) This section provides an overview of Union Pacific's business operations and essential contact information for investors and media [About Union Pacific](index=2&type=section&id=2.1%20About%20Union%20Pacific) Union Pacific is a freight railroad company operating in 23 western states, providing safe, reliable, and efficient service to connect customers and communities to the global economy. The company emphasizes the environmental responsibility of rail freight - Union Pacific (NYSE: UNP) delivers goods with safe, reliable, and efficient service, operating in 23 western states[9](index=9&type=chunk) - The company connects its customers and communities to the global economy, highlighting trains as the most environmentally responsible way to move freight[9](index=9&type=chunk) [Investor Relations & Media Contacts](index=2&type=section&id=2.2%20Investor%20Relations%20%26%20Media%20Contacts) Contact information for Union Pacific's investor relations and media inquiries is provided, with specific individuals and their contact details listed - Investor contact: Diana Prauner at **402-544-4227** or dprauner@up.com[10](index=10&type=chunk) - Media contact: Clarissa Beyah at **402-957-4793** or cbeyah@up.com[10](index=10&type=chunk) [Legal & Transaction Information](index=3&type=section&id=Legal%20%26%20Transaction%20Information) This section outlines legal disclaimers, forward-looking statement cautions, and details regarding the proposed merger transaction [No Offer or Solicitation](index=3&type=section&id=3.1%20No%20Offer%20or%20Solicitation) This communication serves solely for informational purposes and does not constitute an offer to sell, a solicitation to buy securities, or a solicitation of any vote or approval. Any offer of securities will be made strictly by means of a prospectus meeting the requirements of the Securities Act of 1933 - The communication is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval[13](index=13&type=chunk) - No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended[13](index=13&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=3.2%20Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) The document contains forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ materially. These risks include factors related to the proposed merger with Norfolk Southern, such as regulatory approvals, integration challenges, financial impacts, and broader economic and operational risks. Investors are directed to SEC filings for a comprehensive list of risk factors - Statements in the communication are 'forward-looking statements' subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially[15](index=15&type=chunk) - Risks include potential termination of the merger agreement, legal proceedings, failure to obtain timely regulatory or shareholder approvals, inability to realize expected benefits/synergies from the transaction, business disruption, integration costs, reputational risks, dilution from stock issuance, credit rating downgrades, and changes in economic/political conditions[16](index=16&type=chunk) - Investors should refer to Union Pacific's and Norfolk Southern's respective Annual Reports on Form 10-K and other SEC filings for a comprehensive discussion of risk factors[17](index=17&type=chunk)[18](index=18&type=chunk) [Additional Information About the Transaction and Where to Find It](index=4&type=section&id=3.3%20Additional%20Information%20About%20the%20Transaction%20and%20Where%20to%20Find%20It) Union Pacific filed a Registration Statement (Form S-4) with the SEC, which includes a prospectus and a joint proxy statement for the proposed transaction with Norfolk Southern. This document, along with the definitive proxy statements, contains important information for investors and security holders, and free copies are available through the SEC website and the companies' investor relations websites - Union Pacific filed a Registration Statement on Form S-4 with the SEC, which includes a prospectus and a joint proxy statement for shareholders regarding the transaction[19](index=19&type=chunk) - The Registration Statement was declared effective on **September 30, 2025**, and a final prospectus was filed on **October 1, 2025**, with Norfolk Southern filing its definitive proxy statement on the same date[19](index=19&type=chunk) - Investors and security holders are urged to read these documents, which are available free of charge on the SEC's website (http://www.sec.gov) and the investor relations websites of Union Pacific and Norfolk Southern[20](index=20&type=chunk)[21](index=21&type=chunk) [Participants in the Solicitation](index=4&type=section&id=3.4%20Participants%20in%20the%20Solicitation) Union Pacific, Norfolk Southern, and their respective directors and executive officers may be considered participants in the solicitation of proxies for the transaction. Details regarding their interests, including security holdings, are provided in the Definitive Joint Proxy Statement/Prospectus and other SEC filings such as annual reports and proxy statements - Union Pacific, Norfolk Southern, and certain of their directors and executive officers may be deemed participants in the solicitation of proxies for the transaction[23](index=23&type=chunk) - Information about the direct and indirect interests of these participants, including security holdings, is included in the Definitive Joint Proxy Statement/Prospectus[24](index=24&type=chunk) - Further details on Union Pacific's directors and executive officers can be found in its Annual Report and 2025 Proxy Statement, while Norfolk Southern's information is in its 2025 Annual Meeting Proxy Statement and subsequent Form 8-K filings[25](index=25&type=chunk)[27](index=27&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents Union Pacific's condensed consolidated statements of income, financial position, and cash flows [Condensed Consolidated Statements of Income](index=6&type=section&id=4.1%20Condensed%20Consolidated%20Statements%20of%20Income) Union Pacific's income statements show consistent growth in operating revenues and net income for Q3 and YTD 2025 compared to 2024, alongside improvements in operating ratio. The quarterly breakdown for 2025 indicates stable performance throughout the year [Third Quarter & Year-to-Date Comparison (2025 vs 2024)](index=6&type=section&id=4.1.1%20Third%20Quarter%20%26%20Year-to-Date%20Comparison%20(2025%20vs%202024)) For Q3 2025, Union Pacific reported a 3% increase in total operating revenues and a 7% rise in net income compared to Q3 2024. The operating ratio improved by 1.1 percentage points to 59.2%. Year-to-date figures also show growth in revenues and net income, with a 0.8 percentage point improvement in the operating ratio Condensed Consolidated Statements of Income (Q3 & YTD 2025 vs 2024, Millions) | Metric | Q3 2025 (Millions) | Q3 2024 (Millions) | Q3 Change (%) | YTD 2025 (Millions) | YTD 2024 (Millions) | YTD Change (%) | | :---------------------- | :----------------- | :----------------- | :------------ | :------------------ | :------------------ | :------------- | | Total Operating Revenues | $6,244 | $6,091 | 3% | $18,425 | $18,129 | 2% | | Operating Expenses | $3,695 | $3,675 | 1% | $10,980 | $10,941 | 0% | | Operating Income | $2,549 | $2,416 | 6% | $7,445 | $7,188 | 4% | | Net Income | $1,788 | $1,671 | 7% | $5,290 | $4,985 | 6% | | Diluted EPS | $3.01 | $2.75 | 9% | $8.87 | $8.18 | 8% | | Operating Ratio | 59.2% | 60.3% | (1.1) pts | 59.6% | 60.4% | (0.8) pts | | Dividends Declared per Share | $1.38 | $1.34 | 3% | $4.06 | $3.94 | 3% | [Quarterly Breakdown (2025)](index=12&type=section&id=4.1.2%20Quarterly%20Breakdown%20(2025)) The 2025 quarterly breakdown shows a sequential increase in total operating revenues from Q1 to Q3, reaching $6,244 million in Q3. Net income peaked in Q2 at $1,876 million before a slight decrease in Q3 to $1,788 million. The operating ratio improved from 60.7% in Q1 to 59.0% in Q2, then slightly increased to 59.2% in Q3 Condensed Consolidated Statements of Income (2025 Quarterly Breakdown) | Metric | Q1 2025 (Millions) | Q2 2025 (Millions) | Q3 2025 (Millions) | YTD 2025 (Millions) | | :---------------------- | :----------------- | :----------------- | :----------------- | :------------------ | | Total Operating Revenues | $6,027 | $6,154 | $6,244 | $18,425 | | Operating Expenses | $3,656 | $3,629 | $3,695 | $10,980 | | Operating Income | $2,371 | $2,525 | $2,549 | $7,445 | | Net Income | $1,626 | $1,876 | $1,788 | $5,290 | | Diluted EPS | $2.70 | $3.15 | $3.01 | $8.87 | | Operating Ratio | 60.7% | 59.0% | 59.2% | 59.6% | | Dividends Declared per Share | $1.34 | $1.34 | $1.38 | $4.06 | [Condensed Consolidated Statements of Financial Position](index=9&type=section&id=4.2%20Condensed%20Consolidated%20Statements%20of%20Financial%20Position) As of September 30, 2025, Union Pacific's total assets increased to $68,647 million from $67,715 million at year-end 2024. Total liabilities also saw a slight increase, while common shareholders' equity grew to $17,304 million. The company's debt-to-net income ratio improved from 4.6 to 4.5, and the adjusted debt to adjusted EBITDA ratio improved from 2.7 to 2.6 Condensed Consolidated Statements of Financial Position (Millions) | Metric | Sep. 30, 2025 | Dec. 31, 2024 | | :-------------------------------- | :------------ | :------------ | | Total Assets | $68,647 | $67,715 | | Total Liabilities | $51,343 | $50,825 | | Total Common Shareholders' Equity | $17,304 | $16,890 | | Debt / Net Income | 4.5 | 4.6 | | Adjusted Debt / Adjusted EBITDA* | 2.6 | 2.7 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=4.3%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2025, cash provided by operating activities increased to $7,065 million from $6,684 million in the prior year. Cash used in investing activities also increased, while cash used in financing activities remained substantial. Free cash flow remained stable at $1,856 million Condensed Consolidated Statements of Cash Flows (YTD Millions) | Metric | YTD 2025 | YTD 2024 | | :-------------------------------------- | :------- | :------- | | Cash provided by operating activities | $7,065 | $6,684 | | Cash used in investing activities | $(2,791) | $(2,426) | | Cash used in financing activities | $(4,472) | $(4,375) | | Net change in cash, cash equivalents, and restricted cash | $(198) | $(117) | | Free Cash Flow | $1,856 | $1,855 | - Capital investments for 2025 included **$311 million** in locomotive and freight car early lease buyouts, compared to **$96 million** in 2024[34](index=34&type=chunk) [Revenue and Operating Statistics](index=7&type=section&id=Revenue%20and%20Operating%20Statistics) This section details Union Pacific's freight revenue performance by commodity and key operational efficiency metrics [Freight Revenues Statistics](index=7&type=section&id=5.1%20Freight%20Revenues%20Statistics) Union Pacific's freight revenues grew 3% in Q3 and YTD 2025, driven by strong performance in bulk commodities, particularly coal & renewables, and industrial chemicals & plastics. While overall carloads remained flat in Q3, average revenue per car increased. The quarterly breakdown for 2025 shows consistent revenue growth across most segments [Third Quarter & Year-to-Date Comparison (2025 vs 2024)](index=7&type=section&id=5.1.1%20Third%20Quarter%20%26%20Year-to-Date%20Comparison%20(2025%20vs%202024)) In Q3 2025, total freight revenues increased by 3% year-over-year, with significant growth in Coal & renewables (+16%), Fertilizer (+9%), and Industrial chemicals & plastics (+8%). Intermodal and Food & refrigerated segments experienced declines. Total revenue carloads remained flat in Q3 but grew 3% year-to-date Freight Revenues by Commodity (Q3 & YTD 2025 vs 2024, Millions) | Commodity | Q3 2025 | Q3 2024 | Q3 Change (%) | YTD 2025 | YTD 2024 | YTD Change (%) | | :-------------------------- | :------ | :------ | :------------ | :------- | :------- | :------------- | | Grain & grain products | $975 | $923 | 6% | $2,889 | $2,767 | 4% | | Fertilizer | $227 | $208 | 9% | $638 | $612 | 4% | | Food & refrigerated | $258 | $269 | (4)% | $785 | $832 | (6)% | | Coal & renewables | $470 | $405 | 16% | $1,355 | $1,132 | 20% | | Industrial chemicals & plastics | $647 | $598 | 8% | $1,900 | $1,763 | 8% | | Intermodal | $1,199 | $1,241 | (3)% | $3,489 | $3,460 | 1% | | Total Freight Revenues | $5,927 | $5,768 | 3% | $17,461 | $17,022 | 3% | Revenue Carloads & Average Revenue per Car (Q3 & YTD 2025 vs 2024) | Metric | Q3 2025 | Q3 2024 | Q3 Change (%) | YTD 2025 | YTD 2024 | YTD Change (%) | | :-------------------------- | :------ | :------ | :------------ | :------- | :------- | :------------- | | Total Revenue Carloads (thousands) | 2,163 | 2,167 | 0% | 6,374 | 6,171 | 3% | | Average Revenue per Car | $2,740 | $2,662 | 3% | $2,740 | $2,758 | (1)% | [Quarterly Breakdown (2025)](index=13&type=section&id=5.1.2%20Quarterly%20Breakdown%20(2025)) Union Pacific's freight revenues showed a sequential increase throughout 2025, from $5,691 million in Q1 to $5,927 million in Q3. Revenue carloads also increased quarter-over-quarter, reaching 2,163 thousand in Q3. Average revenue per car fluctuated, peaking at $2,764 in Q2 Freight Revenues by Commodity (2025 Quarterly Breakdown, Millions) | Commodity | Q1 2025 | Q2 2025 | Q3 2025 | YTD 2025 | | :-------------------------- | :------ | :------ | :------ | :------- | | Grain & grain products | $950 | $964 | $975 | $2,889 | | Fertilizer | $210 | $201 | $227 | $638 | | Coal & renewables | $416 | $469 | $470 | $1,355 | | Industrial chemicals & plastics | $607 | $646 | $647 | $1,900 | | Intermodal | $1,192 | $1,098 | $1,199 | $3,489 | | Total Freight Revenues | $5,691 | $5,843 | $5,927 | $17,461 | Revenue Carloads & Average Revenue per Car (2025 Quarterly Breakdown) | Metric | Q1 2025 | Q2 2025 | Q3 2025 | YTD 2025 | | :-------------------------- | :------ | :------ | :------ | :------- | | Total Revenue Carloads (thousands) | 2,097 | 2,114 | 2,163 | 6,374 | | Average Revenue per Car | $2,714 | $2,764 | $2,740 | $2,740 | [Operating and Performance Statistics](index=11&type=section&id=5.2%20Operating%20and%20Performance%20Statistics) Union Pacific demonstrated significant operational improvements in Q3 2025, achieving an 8% increase in freight car velocity and a 9% reduction in average terminal dwell time. Service performance indices for both intermodal and manifest freight saw double-digit percentage point improvements, reflecting enhanced efficiency and reliability. Workforce productivity also improved by 6%, while average total employees decreased by 4% Operating and Performance Statistics (Q3 & YTD 2025 vs 2024) | Metric | Q3 2025 | Q3 2024 | Q3 Change (%) | YTD 2025 | YTD 2024 | YTD Change (%) | | :----------------------------------- | :------ | :------ | :------------ | :------- | :------- | :------------- | | Freight car velocity (daily miles/car) | 226 | 210 | 8% | 220 | 205 | 7% | | Average train speed (miles/hour) | 24.2 | 23.3 | 4% | 23.9 | 23.5 | 2% | | Average terminal dwell time (hours) | 20.4 | 22.4 | (9)% | 21.3 | 22.8 | (7)% | | Locomotive productivity (GTMs/horsepower day) | 140 | 135 | 4% | 139 | 135 | 3% | | Intermodal service performance index (%) | 98 | 86 | 12 pts | 97 | 90 | 7 pts | | Manifest service performance index (%) | 100 | 89 | 11 pts | 98 | 87 | 11 pts | | Workforce productivity (car miles/employee) | 1,165 | 1,102 | 6% | 1,126 | 1,044 | 8% | | Total employees (average) | 28,871 | 29,946 | (4)% | 29,576 | 30,518 | (3)% | | Fuel consumption rate | 1.052 | 1.058 | (1)% | 1.072 | 1.084 | (1)% | [Non-GAAP Measures Reconciliation](index=15&type=section&id=Non-GAAP%20Measures%20Reconciliation) This section reconciles non-GAAP financial measures to GAAP, providing adjusted financial and debt performance views [Financial Performance Reconciliation](index=15&type=section&id=6.1%20Financial%20Performance%20Reconciliation) Union Pacific provides reconciliations of GAAP to non-GAAP financial measures, adjusting for items like acquisition-related expenses, deferred tax adjustments, and crew staffing agreements. For Q3 2025, adjusted diluted EPS was $3.08 and the adjusted operating ratio was 58.5%, both showing improvements compared to GAAP figures Q3 2025 Financial Performance Reconciliation (Millions, except per share/percentages) | Metric | Reported Results (GAAP) | Acquisition related expense | Adjusted Results (non-GAAP) | | :---------------------- | :---------------------- | :-------------------------- | :-------------------------- | | Operating Expenses | $3,695 | $(41) | $3,654 | | Operating Income | $2,549 | $41 | $2,590 | | Net Income | $1,788 | $41 | $1,829 | | Earnings per share - diluted | $3.01 | $0.07 | $3.08 | | Operating Ratio | 59.2% | (0.7)% | 58.5% | YTD 2025 Financial Performance Reconciliation (Millions, except per share/percentages) | Metric | Reported Results (GAAP) | Acquisition related expense | Deferred tax adjustment | Crew staffing agreement | Adjusted Results (non-GAAP) | | :---------------------- | :---------------------- | :-------------------------- | :---------------------- | :---------------------- | :-------------------------- | | Operating Expenses | $10,980 | $(42) | - | $(55) | $10,883 | | Operating Income | $7,445 | $42 | - | $55 | $7,542 | | Net Income | $5,290 | $42 | $(115) | $42 | $5,259 | | Earnings per share - diluted | $8.87 | $0.07 | $(0.19) | $0.07 | $8.82 | | Operating Ratio | 59.6% | (0.2)% | -% | (0.3)% | 59.1% | [Debt and EBITDA Reconciliation](index=16&type=section&id=6.2%20Debt%20and%20EBITDA%20Reconciliation) The reconciliation of debt and EBITDA shows an improvement in the adjusted debt to adjusted EBITDA ratio, decreasing from 2.7 at year-end 2024 to 2.6 as of September 30, 2025. This non-GAAP measure provides insight into the company's ability to manage debt levels with cash generated from operations Debt / Net Income and Adjusted Debt / Adjusted EBITDA Reconciliation (Millions, except ratios) | Metric | Sep. 30, 2025 | Dec. 31, 2024 | | :-------------------------------- | :------------ | :------------ | | Debt | $31,807 | $31,192 | | Net Income (trailing twelve months) | $7,052 | $6,747 | | Debt / Net Income | 4.5 | 4.6 | | Adjusted EBITDA | $12,459 | $12,159 | | Adjusted Debt | $32,848 | $32,463 | | Adjusted Debt / Adjusted EBITDA | 2.6 | 2.7 | - Adjusted debt to adjusted EBITDA is a non-GAAP measure used by management and investors to evaluate the company's ability to sustain debt levels with cash generated from operations, and is also used by rating agencies[43](index=43&type=chunk)