Union Pacific (UNP) Bank of America Industrials, Transportation & Airlines Key Leaders Conference 2025 summary

Operational performance and growth

• Volumes are up 6.5% year-over-year, surpassing the 4% quarterly target, with RTMs up over 10% and strong performance in bulk commodities, especially coal and grain.

• Service levels have consistently exceeded 95% for both manifest and intermodal, with enhancements in freight car velocity and workforce productivity.

• Workforce productivity improved by 9%, with ongoing investments in technology, people, and physical assets driving efficiency.

• The network can handle up to 170,000 cars per week, with excess capacity and assets available for further growth.

• Train length, locomotive productivity, and manifest/intermodal SPI all showed positive YoY changes through May 12, 2025.

Market dynamics and business mix

• Bulk segment, led by coal (up 36% in carloads), is driving near-term growth, supported by contract wins and high natural gas prices.

• Premium and international trade volumes increased by 6% and 12% respectively through week 19 of Q2 2025.

• About 60% of business is domestically linked, 14% to Canada/Mexico, and 30% to Asia/other, with international intermodal revenue 40-45% below system average.

• Domestic shipments accounted for 56% of 2024 carloads, with notable growth in Mexico (11%) and Canada (3%).

• International intermodal volumes are up but showing signs of tailing off due to inventory pre-shipping and tariff-related air pockets.

Financial outlook and capital allocation

• EPS growth remains on track to meet the 3-year CAGR target of high-single to low-double digits.

• Operating ratio performance is expected to outpace normal seasonal improvements, with strong core pricing above inflation supporting margins.

• Share repurchases are targeted at $4–$4.5 billion for the year, with $1.7 billion completed in Q1 and continued buybacks in April.

• Capital plan set at $3.4 billion, with leverage at 2.8x debt to EBITDA and a focus on maintaining a strong investment-grade rating.

• 2025 outlook affirmed, with volume impacted by mixed economic conditions, coal demand, and tough international intermodal comparisons.