Union Pacific (UNP) Barclays 43rd Annual Industrial Select Conference summary

Merger and regulatory process

• The merger application with Norfolk Southern is being refiled, with a new expected submission by April 30, following requests for additional information from regulators.

• Management remains confident in the merger's benefits, emphasizing enhanced competition, customer service, and operational efficiency.

• The regulatory process involves public review, potential hearings, and could be expedited due to prior review of the application.

• Leadership expects the deal to close by mid or early next year, despite the slight delay in refiling.

• The merger is positioned as beneficial for employees, with job guarantees for unionized staff, and for the environment by shifting freight from trucks to rail.

Competitive landscape and industry dynamics

• The merger aims to create a seamless, end-to-end railroad, improving service and reducing inventory and transportation costs for customers.

• Competitors are expected to respond with pricing strategies, but management argues that only a seamless network can deliver lasting efficiency gains.

• The company will match the size of its largest western competitor post-merger, increasing its ability to compete in key markets.

• Management downplays competitor objections, attributing them to concerns over increased competition and market share.

• The company highlights the limitations of ad hoc cooperation between railroads, citing past inefficiencies and lack of sustained results.

Financial strategy and shareholder returns

• Management prioritizes returning excess cash to shareholders through dividends and buybacks, after capital needs and M&A.

• The company is focused on core growth, margin performance, and strategic execution as key drivers of share price.