Union Pacific (NYSE:UNP) Conference Transcript

Union Pacific Conference Call Summary Company Overview - Company: Union Pacific (NYSE: UNP) - Date: December 02, 2025 - Speakers: Jim Vena (CEO), Jennifer Hamann (CFO), Kenny Rocker (CMO) Key Points Merger Application and Financial Position - Union Pacific is in the process of completing a merger application with Norfolk Southern, valued at $85 billion [9] - The company has ensured it is financially stable and operationally efficient before proceeding with the merger [3][5] - The merger is expected to enhance operational capabilities and customer service [10][12] Operational Improvements - Union Pacific has improved its decision-making culture, allowing local teams to make operational decisions [6][7] - The company has successfully reduced touch points on rail cars, leading to faster network operations and increased resiliency [7][8] - The operational metrics have shown significant improvements, including a record freight car velocity of 245 miles per day [19] Market Dynamics and Volume Trends - The company has seen strong performance in coal and grain sectors, while facing challenges in domestic intermodal volumes, which are down 4-5% [18][24] - Overall volumes are down 4% quarter-to-date, with expectations for a challenging fourth quarter due to unfavorable mix and merger costs of $30 million-$40 million [21][24] Competitive Landscape - Union Pacific aims to enhance competition by providing faster and more efficient service, particularly in intermodal transport, which is currently underserved [61][62] - The merger is expected to create new market opportunities and improve service offerings, particularly in regions with limited competition [60][64] Pricing Strategy - The company maintains a disciplined pricing strategy, balancing the need for price increases with the importance of service quality [41][77] - Union Pacific is focused on growing its business while managing costs effectively, particularly in light of inflation pressures expected to be around 3.5-4% [36][37] Future Outlook - Union Pacific is optimistic about its position in the market, expecting to lead the industry in operating ratio and return on invested capital by the end of 2025 [22][30] - The company is actively working on its 2026 plan, with a focus on enhancing service and operational efficiency post-merger [35][36] Additional Insights - The merger is seen as beneficial not only for Union Pacific but also for the broader U.S. economy, facilitating smoother transportation of goods across the country [13][12] - Union Pacific is committed to maintaining strong relationships with customers and partners, emphasizing collaboration over competition [67][68] Conclusion Union Pacific is strategically positioning itself for a successful merger with Norfolk Southern, focusing on operational efficiency, market expansion, and maintaining a competitive edge through improved service offerings and disciplined pricing strategies. The company remains optimistic about its future performance despite current volume challenges.