Union Pacific Reports Third Quarter 2026 Results

Fuel expense rose 69% year over year, while operating income increased 15% and revenue carloads grew 6%.

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• Diluted EPS of $3.49, up 16%, and adjusted diluted EPS* of $3.53, up 15%
• Operating ratio (OR) of 59.1% and adjusted OR* of 58.8%
• Revenue carloads grew 6%

OMAHA, Neb.--(BUSINESS WIRE)-- Union Pacific Corporation (NYSE: UNP) today reported third quarter 2026 net income of $2.1 billion, up 16%, and diluted earnings per share (EPS) of $3.49, up 16%, compared to reported third quarter 2025 net income of $1.8 billion and diluted EPS of $3.01. Adjusted third quarter 2026 net income* of $2.1 billion increased 15%, and adjusted diluted EPS* of $3.53 increased 15%, compared to adjusted third quarter 2025 net income* of $1.8 billion and adjusted diluted EPS* of $3.08.

"Union Pacific's third quarter results demonstrate our ability to safely deliver the service we sold to our customers while efficiently handling six percent volume growth," said Jim Vena, Union Pacific Chief Executive Officer. "We executed at a consistently high level, enabling record financial results and further reinforcing our position as the industry leader. We look forward to the upcoming steps of the Surface Transportation Board's merger review process and to delivering the benefits of America's first transcontinental railroad for our customers."

Third Quarter Summary: 2026 vs. 2025

Financial Results: Record Financial Results Driven by Volume Growth, Pricing Strength and Operational Execution; Record Freight Revenue, Freight Revenue excluding Fuel Surcharge, Operating Revenue, Operating Income, and Net Income

• Operating revenue of $7.2 billion grew 15% driven by higher fuel surcharge, 6% volume growth, core pricing gains and increased other revenue partially offset by business mix.
• Freight revenue excluding fuel surcharge increased 6%.
• Reported operating ratio improved 10 basis points to 59.1%. Adjusted operating ratio* increased 30 basis points to 58.8%. Higher fuel price unfavorably impacted operating ratio 140 basis points.

Operating Results: Operational Excellence Supports Volume Growth; Record Workforce Productivity, Train Length, and Fuel Consumption Rate

• Reportable personal injury rate improved.
• Freight car velocity was 228 daily miles per car, a 1% increase.
• Average terminal dwell was 19.9 hours, a 2% improvement.
• Fuel consumption rate was 1.034, measured in gallons of fuel per thousand gross ton-miles, a 2% improvement.
• Workforce productivity was 1,219 car miles per employee, a 5% increase.

* See attached supplemental schedule of non-GAAP measures for a reconciliation to GAAP.

2026 Outlook - On Track with Investor Day Targets

Affirmed:

• Meeting increased customer demand with strong service; mixed economic forecast.
• Reported earnings per share growth of high-single digit; consistent with attaining 3-year CAGR target of high-single to low-double digit through 2027.
• Pricing dollars in excess of inflation dollars.
• Industry-leading operating ratio and return on invested capital.
• Continued strong cash generation and consistent annual dividend increases.

Updated:

• Operating ratio improvement from core business; reported operating ratio challenged by high fuel prices.
• Capital plan of $3.5 billion.

Third Quarter 2026 Earnings Conference Call

Union Pacific will webcast its third quarter 2026 earnings release presentation live at www.up.com/investor and via teleconference on Thursday, October 22, 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 control, 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, 2025, as filed with the SEC on February 9, 2026 (available at https://www.sec.gov/ix?doc=/Archives/edgar/data/0000702165/000162828026006268/nsc-20251231.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, 2025, as filed with the SEC on February 6, 2026 (available at https://www.sec.gov/ix?doc=/Archives/edgar/data/100885/000010088526000037/unp-20251231.htm) and the Company’s subsequent filings with the SEC, 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 September 30,	3rd quarter										Year-to-date
		2026				2025			%			2026				2025			%
Operating revenues
Freight revenues	$		6,813		$		5,927		15%		$		19,224		$		17,461		10%
Other revenues			384				317		21				1,054				964		9
Total operating revenues			7,197				6,244		15				20,278				18,425		10
Operating expenses
Compensation and benefits			1,264				1,214		4				3,731				3,675		2
Fuel			1,040				616		69				2,621				1,795		46
Purchased services and materials			746				683		9				2,128				1,956		9
Depreciation			643				618		4				1,914				1,841		4
Equipment and other rents			206				212		(3)				639				683		(6)
Other			355				352		1				1,081				1,030		5
Total operating expenses			4,254				3,695		15				12,114				10,980		10
Operating income			2,943				2,549		15				8,164				7,445		10
Other income, net			95				96		(1)				291				297		(2)
Interest expense			(312	)			(327	)	(5)				(945	)			(984	)	(4)
Income before income taxes			2,726				2,318		18				7,510				6,758		11
Income tax expense			(650	)			(530	)	23				(1,740	)			(1,468	)	19
Net income	$		2,076		$		1,788		16%		$		5,770		$		5,290		9%
Share and per share
Earnings per share - basic	$		3.50		$		3.02		16%		$		9.72		$		8.88		9%
Earnings per share - diluted	$		3.49		$		3.01		16		$		9.71		$		8.87		9
Weighted average number of shares - basic			593.7				592.4		-				593.4				595.8		-
Weighted average number of shares - diluted			594.5				593.2		-				594.0				596.7		-
Dividends declared per share	$		1.42		$		1.38		3		$		4.18		$		4.06		3
Operating ratio			59.1	%			59.2	%	(0.1)pts				59.7	%			59.6	%	0.1pts
Effective tax rate			23.8	%			22.9	%	0.9pts				23.2	%			21.7	%	1.5pts

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Freight Revenues Statistics (unaudited)
	3rd quarter						Year-to-date
For the periods ended September 30,		2026		2025	%			2026		2025	%
Freight revenues (millions)
Grain & grain products	$	1,085	$	975	11%		$	3,248	$	2,889	12%
Fertilizer		234		227	3			687		638	8
Food & refrigerated		272		258	5			791		785	1
Coal & renewables		525		470	12			1,459		1,355	8
Bulk		2,116		1,930	10			6,185		5,667	9
Industrial chemicals & plastics		701		647	8			2,041		1,900	7
Metals & minerals		666		568	17			1,842		1,650	12
Forest products		371		327	13			1,045		988	6
Energy & specialized markets		771		652	18			2,158		1,950	11
Industrial		2,509		2,194	14			7,086		6,488	9
Automotive		671		604	11			1,934		1,817	6
Intermodal		1,517		1,199	27			4,019		3,489	15
Premium		2,188		1,803	21			5,953		5,306	12
Total	$	6,813	$	5,927	15%		$	19,224	$	17,461	10%
Revenue carloads (thousands)
Grain & grain products		225		215	5%			710		645	10%
Fertilizer		55		58	(5)			161		162	(1)
Food & refrigerated		40		41	(2)			121		127	(5)
Coal & renewables		209		216	(3)			599		606	(1)
Bulk		529		530	-			1,591		1,540	3
Industrial chemicals & plastics		185		182	2			549		528	4
Metals & minerals		209		193	8			588		558	5
Forest products		54		52	4			156		155	1
Energy & specialized markets		158		147	7			459		439	5
Industrial		606		574	6			1,752		1,680	4
Automotive		202		199	2			595		603	(1)
Intermodal [a]		956		860	11			2,601		2,551	2
Premium		1,158		1,059	9			3,196		3,154	1
Total		2,293		2,163	6%			6,539		6,374	3%
Average revenue per car
Grain & grain products	$	4,837	$	4,532	7%		$	4,577	$	4,478	2%
Fertilizer		4,256		3,875	10			4,267		3,929	9
Food & refrigerated		6,678		6,306	6			6,524		6,199	5
Coal & renewables		2,516		2,181	15			2,437		2,237	9
Bulk		4,004		3,641	10			3,889		3,680	6
Industrial chemicals & plastics		3,789		3,548	7			3,717		3,598	3
Metals & minerals		3,185		2,944	8			3,134		2,959	6
Forest products		6,911		6,315	9			6,706		6,363	5
Energy & specialized markets		4,857		4,462	9			4,695		4,445	6
Industrial		4,136		3,828	8			4,044		3,863	5
Automotive		3,324		3,027	10			3,251		3,011	8
Intermodal [a]		1,586		1,393	14			1,545		1,368	13
Premium		1,889		1,701	11			1,862		1,682	11
Average	$	2,971	$	2,740	8%		$	2,940	$	2,740	7%
[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	Sep. 30, 2026		Dec. 31, 2025
Assets
Cash and cash equivalents	$	2,211	$	1,266
Short-term investments		875		250
Other current assets		3,431		3,039
Investments		3,030		2,885
Properties, net		60,626		59,645
Other assets		2,436		2,613
Total assets	$	72,609	$	69,698
Liabilities and common shareholders' equity
Debt due within one year	$	1,289	$	1,520
Other current liabilities		4,316		3,494
Debt due after one year		29,035		30,294
Deferred income taxes		13,640		13,421
Other long-term liabilities		2,311		2,502
Total liabilities		50,591		51,231
Total common shareholders' equity		22,018		18,467
Total liabilities and common shareholders' equity	$	72,609	$	69,698

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Condensed Consolidated Statements of Cash Flows (unaudited)
	Year-to-date
Millions, for the periods ended September 30,		2026			2025
Operating activities
Net income	$	5,770		$	5,290
Depreciation		1,914			1,841
Deferred and other income taxes		207			172
Other - net		411			(238	)
Cash provided by operating activities		8,302			7,065
Investing activities
Capital investments*		(2,834	)		(2,792	)
Purchases of short-term investments		(975	)		-
Maturities of short-term investments		350			-
Other - net		3			1
Cash used in investing activities		(3,456	)		(2,791	)
Financing activities
Dividends paid		(2,484	)		(2,418	)
Debt repaid		(1,519	)		(1,424	)
Share repurchase programs		(26	)		(2,679	)
Debt issued		-			1,995
Other - net		121			54
Cash used in financing activities		(3,908	)		(4,472	)
Net change in cash, cash equivalents, and restricted cash		938			(198	)
Cash, cash equivalents, and restricted cash at beginning of year		1,280			1,028
Cash, cash equivalents, and restricted cash at end of period	$	2,218		$	830
Free cash flow**
Cash provided by operating activities	$	8,302		$	7,065
Cash used in investing activities		(3,456	)		(2,791	)
Dividends paid		(2,484	)		(2,418	)
Free cash flow	$	2,362		$	1,856
* Capital investments include locomotive and freight car early lease buyouts of $320 million in 2026 and $311 million in 2025.
** Free cash flow is defined as cash provided by operating activities less cash used in investing activities and dividends paid. Free cash flow is considered a non-GAAP financial measure by SEC Regulation G and Item 10(e) of SEC Regulation S-K and may not be defined and calculated by other companies in the same manner. We believe free cash flow is important to management and investors in evaluating our financial performance and measures our ability to generate cash without additional external financing. Free cash flow should be considered in addition to, rather than as a substitute for, cash provided by operating activities.

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Operating and Performance Statistics (unaudited)
	3rd quarter						Year-to-date
For the periods ended September 30,		2026		2025	%			2026		2025	%
Operating/performance statistics
Freight car velocity (daily miles per car)		228		226	1%			231		220	5%
Average train speed (miles per hour)*		24.3		24.2	-			24.8		23.9	4
Average terminal dwell time (hours)*		19.9		20.4	(2)			19.8		21.3	(7)
Locomotive productivity (GTMs per horsepower day)		140		140	-			142		139	2
Gross ton-miles (GTMs) (millions)		232,506		223,029	4			678,251		656,079	3
Train length (feet)		9,969		9,801	2			9,871		9,661	2
Intermodal service performance index (%)		92		98	(6) pts			95		97	(2) pts
Manifest service performance index (%)		93		100	(7) pts			95		98	(3) pts
Workforce productivity (car miles per employee)		1,219		1,165	5			1,186		1,126	5
Total employees (average)		28,540		28,871	(1)			28,658		29,576	(3)
Locomotive fuel statistics
Average fuel price per gallon consumed	$	4.21	$	2.56	64%		$	3.59	$	2.49	44%
Fuel consumed in gallons (millions)		240		235	2			712		703	1
Fuel consumption rate**		1.034		1.052	(2)			1.049		1.072	(2)
Revenue ton-miles (millions)
Grain & grain products		22,985		21,646	6%			71,199		64,276	11%
Fertilizer		3,264		3,501	(7)			10,465		10,278	2
Food & refrigerated		4,503		4,559	(1)			13,425		13,808	(3)
Coal & renewables		23,482		24,013	(2)			69,417		67,344	3
Bulk		54,234		53,719	1			164,506		155,706	6
Industrial chemicals & plastics		8,443		8,087	4			24,929		23,828	5
Metals & minerals		9,898		8,666	14			27,776		25,328	10
Forest products		5,455		5,336	2			15,876		16,138	(2)
Energy & specialized markets		11,223		10,032	12			31,864		29,762	7
Industrial		35,019		32,121	9			100,445		95,056	6
Automotive		4,514		4,495	-			13,476		13,695	(2)
Intermodal		20,314		18,520	10			57,100		55,959	2
Premium		24,828		23,015	8			70,576		69,654	1
Total		114,081		108,855	5%			335,527		320,416	5%
* 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,	2026
		1st qtr				2nd qtr				3rd qtr			Year-to-date
Operating revenues
Freight revenues		$	5,893			$	6,518			$	6,813			$	19,224
Other revenues			324				346				384				1,054
Total operating revenues			6,217				6,864				7,197				20,278
Operating expenses
Compensation and benefits			1,227				1,240				1,264				3,731
Fuel			643				938				1,040				2,621
Purchased services and materials			673				709				746				2,128
Depreciation			633				638				643				1,914
Equipment and other rents			219				214				206				639
Other			364				362				355				1,081
Total operating expenses			3,759				4,101				4,254				12,114
Operating income			2,458				2,763				2,943				8,164
Other income, net			91				105				95				291
Interest expense			(320	)			(313	)			(312	)			(945	)
Income before income taxes			2,229				2,555				2,726				7,510
Income tax expense			(528	)			(562	)			(650	)			(1,740	)
Net income	$		1,701			$	1,993			$	2,076			$	5,770
Share and per share
Earnings per share - basic		$	2.87			$	3.36			$	3.50			$	9.72
Earnings per share - diluted		$	2.87			$	3.36			$	3.49			$	9.71
Weighted average number of shares - basic			593.0				593.4				593.7				593.4
Weighted average number of shares - diluted			593.6				594.0				594.5				594.0
Dividends declared per share		$	1.38			$	1.38			$	1.42			$	4.18
Operating ratio			60.5	%			59.7	%			59.1	%			59.7	%
Effective tax rate			23.7	%			22.0	%			23.8	%			23.2	%

UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Freight Revenue Statistics (unaudited)
	2026
	1st qtr		2nd qtr		3rd qtr		Year-to-date
Freight revenues (millions)
Grain & grain products	$	1,057	$	1,106	$	1,085	$	3,248
Fertilizer		236		217		234		687
Food & refrigerated		247		272		272		791
Coal & renewables		486		448		525		1,459
Bulk		2,026		2,043		2,116		6,185
Industrial chemicals & plastics		655		685		701		2,041
Metals & minerals		555		621		666		1,842
Forest products		318		356		371		1,045
Energy & specialized markets		663		724		771		2,158
Industrial		2,191		2,386		2,509		7,086
Automotive		560		703		671		1,934
Intermodal		1,116		1,386		1,517		4,019
Premium		1,676		2,089		2,188		5,953
Total	$	5,893	$	6,518	$	6,813	$	19,224
Revenue carloads (thousands)
Grain & grain products		243		242		225		710
Fertilizer		52		54		55		161
Food & refrigerated		39		42		40		121
Coal & renewables		214		176		209		599
Bulk		548		514		529		1,591
Industrial chemicals & plastics		181		183		185		549
Metals & minerals		183		196		209		588
Forest products		49		53		54		156
Energy & specialized markets		147		154		158		459
Industrial		560		586		606		1,752
Automotive		183		210		202		595
Intermodal [a]		792		853		956		2,601
Premium		975		1,063		1,158		3,196
Total		2,083		2,163		2,293		6,539
Average revenue per car
Grain & grain products	$	4,345	$	4,568	$	4,837	$	4,577
Fertilizer		4,564		3,995		4,256		4,267
Food & refrigerated		6,414		6,474		6,678		6,524
Coal & renewables		2,270		2,546		2,516		2,437
Bulk		3,700		3,971		4,004		3,889
Industrial chemicals & plastics		3,620		3,739		3,789		3,717
Metals & minerals		3,028		3,179		3,185		3,134
Forest products		6,505		6,686		6,911		6,706
Energy & specialized markets		4,505		4,711		4,857		4,695
Industrial		3,911		4,075		4,136		4,044
Automotive		3,058		3,350		3,324		3,251
Intermodal [a]		1,408		1,626		1,586		1,545
Premium		1,718		1,966		1,889		1,862
Average	$	2,829	$	3,014	$	2,971	$	2,940
[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 September 30, 2026	Reported results (GAAP)			Acquisition- related expense			Adjusted results (non-GAAP)
Operating expenses	$	4,254		$	(22	)	$	4,232
Operating income		2,943			22			2,965
Income tax expense [a]		(650	)		-			(650	)
Net income		2,076			22			2,098
Earnings per share - diluted	$	3.49		$	0.04		$	3.53
Operating ratio		59.1	%		(0.3	)%		58.8	%

Millions, except per share amounts and percentages, for the three months ended September 30, 2025	Reported results (GAAP)			Acquisition- related expense			Adjusted results (non-GAAP)
Operating expenses	$	3,695		$	(41	)	$	3,654
Operating income		2,549			41			2,590
Income tax expense [a]		(530	)		-			(530	)
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	%
[a] Certain acquisition-related costs are non-deductible for income tax purposes.
* The above tables reconcile our results for the three months ended September 30, 2026 and 2025, to adjusted 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 table are considered non-GAAP by SEC Regulation G and Item 10(e) 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, for the nine months ended September 30, 2026	Reported results (GAAP)			Acquisition- related expense			Adjusted results (non-GAAP)
Operating expenses	$	12,114		$	(93	)	$	12,021
Operating income		8,164			93			8,257
Income tax expense [a]		(1,740	)		-			(1,740	)
Net income		5,770			93			5,863
Earnings per share - diluted	$	9.71		$	0.16		$	9.87
Operating ratio		59.7	%		(0.4	)%		59.3	%

Millions, except per share amounts and percentages, for the nine months ended September 30, 2025	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
Income tax expense [a]		(1,468	)		-			(115	)		(13	)		(1,596	)
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	%
[a] Certain acquisition-related costs are non-deductible for income tax purposes.
* The above tables reconcile our results for the nine months ended September 30, 2026 and 2025, to adjusted 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 EPS, and adjusted operating ratio, as applicable, among other measures, to evaluate our actual operating performance. The measures listed in the above table are considered non-GAAP by SEC Regulation G and Item 10(e) 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 for the trailing twelve months ended [1]	Sep. 30, 2026		Dec. 31, 2025
Debt	$	30,324	$	31,814
Net income		7,618		7,138
Debt / net income		4.0		4.5

Adjusted debt / adjusted EBITDA*
Millions, except ratios for the trailing twelve months ended [1]	Sep. 30, 2026			Dec. 31, 2025
Net income	$	7,618		$	7,138
Add:
Income tax expense		2,300			2,028
Depreciation		2,538			2,465
Interest expense		1,270			1,309
EBITDA	$	13,726		$	12,940
Adjustments:
Other income, net		(623	)		(629	)
Interest on operating lease liabilities [2]		33			40
Adjusted EBITDA (a)	$	13,136		$	12,351
Debt	$	30,324		$	31,814
Operating lease liabilities		788			1,008
Adjusted debt (b)	$	31,112		$	32,822
Adjusted debt / adjusted EBITDA (b/a)		2.4			2.7
[1] The trailing twelve months income statement information ended September 30, 2026, is recalculated by taking the twelve months ended December 31, 2025, subtracting the nine months ended September 30, 2025, and adding the nine months ended September 30, 2026.
[2] 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(e) 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 September 30, 2026, and December 31, 2025, the incremental borrowing rate on operating leases was 4.2% and 4.0%, respectively. Pension and OPEB were funded at September 30, 2026, and December 31, 2025.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20261022758474/en/

Union Pacific Investor contact: Diana Prauner at 402-544-4227 or dprauner@up.com
Union Pacific Media contact: Kristen South at 402-544-3435 or kmsouth@up.com

Source: Union Pacific Corporation

Key Terms

non-gaap financial

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

cagr financial

Compound Annual Growth Rate (CAGR) measures the average yearly growth of an investment, revenue, or other metric over a multi-year period as if it had grown at a steady rate each year. Think of it like the constant speed that would take you from the starting value to the ending value over the same time—useful because it smooths out ups and downs and lets investors compare different assets or performance periods on an even footing.