AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 29/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · The integrated network, 32,889 route miles and distinctive six-gateway Mexico coverage establish a substantial existing geographic franchise. Recurring core pricing gains support commercial relevance. Efficient-scale protection remains an inference: route-level exclusivity, replication economics and superior costs versus named rivals are not demonstrated.
durability · 2/4 · Gateway coverage persists across 2023 and 2025 disclosures, and core pricing gains continue through third-quarter 2026. Maintaining the rail system supports persistence but requires continuing investment. Alternative modes, substitutable origins and regulated rates limit evidence of durable protection across the entire franchise.
customer dependency · 2/4 · Distinctive gateway access and continued shipment growth alongside pricing gains indicate customer utility indirectly. They do not establish captivity or switching costs. Motor-carrier service advantages and disclosed product and geographic substitutes show meaningful customer alternatives, preventing a stronger dependency assessment.
erosion resilience · 2/4 · Pricing gains, improved service and higher workforce and fuel productivity demonstrate adaptation as volumes grow. Third-quarter reported operating ratio improved slightly, but adjusted operating ratio deteriorated and fuel remained a substantial headwind. These actual outcomes show resilience with material limits, rather than treating hypothetical risks as realized failures.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 3/4 · Core pricing gains contributed to reported freight revenue in 2023, 2024, 2025 and third-quarter 2026, including the 2023 volume decline. This demonstrates recurring realized pricing strength. Its magnitude is undisclosed; neither total revenue growth nor average revenue per car isolates price from fuel surcharges and mix.
retention · 2/4 · Volumes grew 3% in 2024, 1% in 2025 and 6% in third-quarter 2026 alongside core pricing gains. Improved service supports repeat-demand utility indirectly. Aggregate growth can reflect market conditions and new business, however, and does not identify retained customers or establish that price increases caused no customer losses.
margin resilience · 2/4 · Pricing and productivity offset disclosed pressures in 2025. In third-quarter 2026, reported operating ratio improved to 59.1%, but adjusted ratio worsened to 58.8%, with a 140-basis-point fuel headwind. Fuel recovery provides partial protection with an approximately two-month lag; outcomes remain mixed despite higher operating income.
contractual freedom · 2/4 · Realized core pricing gains and current recovery of significant fuel expenses demonstrate practical ability to adjust charges. Disclosed STB jurisdiction over certain regulated rates constrains that freedom. The regulatory passage is historical, while current contract duration, unilateral repricing rights and regulated traffic exposure remain unspecified.
Predictability93
5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 6.50
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.67
- observedAnnualPeriods
- 5.00
Financial strength35
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 31.64
- netDebtEbitGrade
- 37.95
- interestCoverageGrade
- 59.29
- currentRatioGrade
- 12.68
- Debt / FCF (x)
- 5.79
- Net debt / operating income (x)
- 3.10
- Interest coverage (x)
- 7.52
- Current ratio (x)
- 0.91
Capital allocation90
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 20.42
- 3-year average dilution (%)
- -1.50
- 3-year average SBC / revenue (%)
- 0.50
- cashConversionGrade
- 79.78
Management75
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 3/4 · First-half 2026 operating cash of $5.516 billion supported $1.810 billion of capital investments, $1.640 billion of dividends and $1.506 billion of debt repayments without debt issuance. The repurchase pause continued through September. These outcomes demonstrate restraint, although acquisition returns remain unproven and the conditional $2.5 billion termination fee is material.
incentive alignment · 3/4 · Actual 2025 equity grants combined multiyear ROIC and relative operating-income incentives with options; 2023–2025 performance units vested at 86% of target. All NEOs met ownership requirements at December 31, 2025, excluding unvested awards from compliance. Options lack performance vesting, and subsequent plan amendments are not substantively explained.
execution · 3/4 · Measured 2025 injury and derailment improvements and higher service performance support execution. Third-quarter 2026 added 6% carload growth, 1% higher freight-car velocity, 2% better fuel consumption and 5% higher workforce productivity. These are issuer-reported operating outcomes, not proof of competitor leadership; adjusted margin deterioration limits the conclusion.
governance · 3/4 · An independent chairman, independent standing committees, executive sessions and annual evaluations provide concrete oversight structures. Twelve Board meetings in 2025 and disclosed attendance demonstrate activity. Actual May 2026 advisory pay approval adds shareholder-vote evidence, but neither favorable voting nor formal practices establishes exceptional oversight effectiveness.
Evidence
Although we provide and analyze revenues by commodity group, we treat the financial results of the Railroad as one segment due to the integrated nature of our rail network.
2025 Form 10-K, filed 2026-02-06; Business—integrated rail network · Filed 06/02/2026
We have 32,889 route miles, connecting Pacific Coast and Gulf Coast ports with the Midwest and Eastern U.S.
2025 Form 10-K, filed 2026-02-06; Operations—route miles · Filed 06/02/2026
population centers, operates from all major West Coast and Gulf Coast ports to Eastern gateways, connects with Canada's rail systems, and is the only railroad serving all six major Mexico gateways.
2025 Form 10-K, filed 2026-02-06; Business—port and gateway coverage · Filed 06/02/2026
population centers, operates from all major West Coast and Gulf Coast ports to Eastern gateways, connects with Canada's rail systems, and is the only railroad serving all six major Mexico gateways.
2023 Form 10-K, filed 2024-02-09; Business—historical gateway coverage · Filed 09/02/2024
Freight revenues decreased 3% year-over-year to $22.6 billion driven by lower fuel surcharge revenues, negative mix of traffic (decreased lumber shipments and increased short haul rock shipments), and a 1% decrease in volume, partially offset by core pricing gains.
2023 Form 10-K, filed 2024-02-09; MD&A—freight revenue, volume, pricing, fuel and mix · Filed 09/02/2024
Freight revenues increased 1% year-over-year to $22.8 billion driven by a 3% increase in volumes and core pricing gains, partially offset by lower fuel surcharge revenues and negative mix of traffic (for example, a relative increase in international intermodal shipments, which have a lower ARC).
2024 Form 10-K, filed 2025-02-07; MD&A—freight revenue, volume, pricing, fuel and mix · Filed 07/02/2025
Freight revenues of $23.2 billion increased 2% from 2024 driven by core pricing gains and a 1% increase in volumes, partially offset by traffic mix (for example, a relative increase in coal and rock shipments, which have a lower ARC, combined with a decline in lumber shipments, which have a higher ARC) and lower fuel surcharge revenues.
2025 Form 10-K, filed 2026-02-06; MD&A—freight revenue, volume, pricing, fuel and mix · Filed 06/02/2026
Freight revenues increased 15% in the third quarter of 2026 compared to the same period in 2025 driven by higher fuel surcharge revenues, 6% carload growth, and core pricing gains, which more than offset an unfavorable business mix (from an increase in shipments with lower ARC, such as intermodal).
September 2026 Form 10-Q, filed 2026-10-22; MD&A—third-quarter freight revenue drivers · Filed 22/10/2026
Motor carrier competition exists in all three of our commodity groups.
2025 Form 10-K, filed 2026-02-06; Competition—motor carriers · Filed 06/02/2026
Because of the proximity of our routes to major inland and Gulf Coast waterways, barges can be particularly competitive, especially for grain and bulk commodities in certain areas where we operate.
2025 Form 10-K, filed 2026-02-06; Competition—barges · Filed 06/02/2026
Motor carriers in particular generally have an advantage over railroads with respect to transit times and timeliness of service.
2025 Form 10-K, filed 2026-02-06; Competition—motor-carrier service advantages · Filed 06/02/2026
Additionally, we must build or acquire and maintain our rail system, while trucks, barges, and maritime operators are able to use public rights-of-way maintained by public entities.
2025 Form 10-K, filed 2026-02-06; Competition—rail infrastructure obligations versus public rights-of-way · Filed 06/02/2026
Many movements face product or geographic competition where our customers can use different products (e.g., natural gas instead of coal, sorghum instead of corn) or commodities from different locations (e.g., grain from states or countries that we do not serve, crude oil from different regions).
2025 Form 10-K, filed 2026-02-06; Competition—product and geographic substitutes · Filed 06/02/2026
As fuel prices fluctuate, our fuel surcharge programs trail such fluctuations in fuel prices by approximately two months and are from time-to-time a significant source of quarter-over-quarter and year-over-year volatility, particularly in periods of rapidly changing prices.
2025 Form 10-K, filed 2026-02-06; Financial risks—approximately two-month fuel-surcharge lag · Filed 06/02/2026
The STB has jurisdiction over rates charged on certain regulated rail traffic; common carrier service of regulated traffic; freight car compensation; transfer, extension, or abandonment of rail lines; and acquisition of control of rail common carriers.
2023 Form 10-K, filed 2024-02-09; Regulation—STB jurisdiction over certain regulated traffic and other activities · Filed 09/02/2024
If there is significant demand for our services that exceeds the designed capacity of our network or shifts in traffic flow that are contrary to the designed capacity of our network, we can experience challenges, including congestion and reduced velocity, that could compromise the level of service we provide to our customers.
2025 Form 10-K, filed 2026-02-06; Strategic and operational risks—capacity and congestion · Filed 06/02/2026
Operating income increased 9% to $2.8 billion reflecting top-line growth, while the operating ratio of 59.7% deteriorated 0.7 points primarily resulting from the impact of higher fuel prices compared to the second quarter of 2025.
June 2026 Form 10-Q, filed 2026-07-23; MD&A—second-quarter operating income and fuel-driven operating-ratio deterioration · Filed 23/07/2026
Although we currently are able to recover a significant amount of our fuel expenses from our customers through revenues from fuel surcharges, we cannot be certain that we will always be able to mitigate rising or elevated fuel costs through our fuel surcharges.
2025 Form 10-K, filed 2026-02-06; Financial risks—current fuel recovery and its limitations · Filed 06/02/2026
Changes in price, traffic mix, and fuel surcharges drive ARC.
September 2026 Form 10-Q, filed 2026-10-22; MD&A—average revenue per car includes price, mix and fuel surcharges · Filed 22/10/2026
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
%
0.1
pts
Effective tax rate
23.8
%
22.9
%
0.9
pts
23.2
%
21.7
%
1.5
pts
1
UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
Third-quarter earnings release, filed 2026-10-22; third-quarter and year-to-date 2026 versus 2025 financial results · Filed 22/10/2026
Adjusted operating ratio* increased 30 basis points to 58.8%.
Third-quarter earnings release, filed 2026-10-22; third-quarter 2026 versus 2025 adjusted operating ratio · Filed 22/10/2026
Higher fuel price unfavorably impacted operating ratio 140 basis points.
Third-quarter earnings release, filed 2026-10-22; third-quarter fuel-price impact on operating ratio · Filed 22/10/2026
•Financial results – Core pricing gains, strong productivity, and 1% volume growth positively impacted our financial results and offset the impact of inflation, negative business mix, and acquisition-related costs.
2026 proxy, filed 2026-03-25; 2025 financial results—pricing, productivity and volume offsetting pressures · Filed 25/03/2026
Compared to 2024, our personal injury rate (the number of reportable injuries for every 200,000 employee-hours worked) of 0.68 improved 24% and our derailment incident rate (the number of reportable derailment incidents per million train miles) of 1.75 improved 19%.
2026 proxy, filed 2026-03-25; 2025 safety outcomes with injury and derailment denominators · Filed 25/03/2026
Service Performance Index (SPI) (a ratio of the service customers are currently receiving relative to the best monthly performance over the last three years) for both intermodal and manifest products improved 9 and 11 points, respectively, compared to 2024 while we handled more volume.
2026 proxy, filed 2026-03-25; 2025 Service Performance Index definition and changes · Filed 25/03/2026
•Freight car velocity was 228 daily miles per car, a 1% increase.
Third-quarter earnings release, filed 2026-10-22; third-quarter 2026 versus 2025 freight-car velocity · Filed 22/10/2026
•Fuel consumption rate was 1.034, measured in gallons of fuel per thousand gross ton-miles, a 2% improvement.
Third-quarter earnings release, filed 2026-10-22; third-quarter 2026 versus 2025 fuel consumption per thousand gross ton-miles · Filed 22/10/2026
•Workforce productivity was 1,219 car miles per employee, a 5% increase.
Third-quarter earnings release, filed 2026-10-22; third-quarter 2026 versus 2025 workforce productivity · Filed 22/10/2026
5 Table of Contents Condensed Consolidated Statements of Cash Flows (Unaudited) Union Pacific Corporation and Subsidiary Companies Millions, for the six months ended June 30, 2026 2025 Operating activities Net income $ 3,694 $ 3,502 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 1,271 1,223 Deferred and other income taxes 93 (123) Other operating activities, net 6 (43) Changes in current assets and liabilities: Accounts receivable, net (270) (21) Materials and supplies (132) (5) Other current assets (26) (49) Accounts payable and other current liabilities 52 (203) Income and other taxes 828 262 Cash provided by operating activities 5,516 4,543 Investing activities Capital investments (1,810) (1,842) Other investing activities, net (254) 3 Cash used in investing activities (2,064) (1,839) Financing activities Dividends paid (1,640) (1,599) Debt repaid (1,506) (409) Share repurchase programs (Note 16) (26) (2,679) Debt issued (Note 14) - 1,995 Other financing activities, net 63 43 Cash used in financing activities (3,109) (2,649) Net change in cash, cash equivalents, and restricted cash 343 55 Cash, cash equivalents, and restricted cash at beginning of year 1,280 1,028 Cash, cash equivalents, and restricted cash at end of period $ 1,623 $ 1,083 Supplemental cash flow information Non-cash investing and financing activities: Capital investments accrued but not yet paid $ 140 $ 157 Cash paid during the period for: Income taxes, net of refunds $ (236) $ (785) Interest, net of amounts capitalized (638) (610) Reconciliation of cash, cash equivalents, and restricted cash to the Condensed Consolidated Statement of Financial Position: Cash and cash equivalents $ 1,614 $ 1,060 Restricted cash equivalents in other current assets 2 18 Restricted cash equivalents in other assets 7 5 Total cash, cash equivalents, and restricted cash equivalents per above $ 1,623 $ 1,083 The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
June 2026 Form 10-Q, filed 2026-07-23; unaudited cash flows, millions, six months ended June 30, 2026 and 2025 · Filed 23/07/2026
[b]As part of the pending acquisition of Norfolk Southern described in Note 18 to the Condensed Consolidated Financial Statements, Item 1, we paused our share repurchases.
September 2026 Form 10-Q, filed 2026-10-22; repurchase footnote—pause for pending acquisition · Filed 22/10/2026
Both Union Pacific and Norfolk Southern may be required to pay the other a termination fee of $2.5 billion if the merger agreement is terminated under certain circumstances described in the merger agreement.
September 2026 Form 10-Q, filed 2026-10-22; merger agreement—conditional reciprocal termination fee · Filed 22/10/2026
The 2025 equity grants for each of the NEOs consisted of sixty percent (60%) performance stock units (PSUs) and forty percent (40%) stock options.
2026 proxy, filed 2026-03-25; actual 2025 NEO equity-grant composition · Filed 25/03/2026
The PSUs granted in February 2025 (the 2025 PSUs) may be earned based on two performance criteria: two-thirds (2/3) on the average annual return on invested capital (ROIC) for a three-year performance period (Performance Period) and one-third (1/3) on the Company’s operating income growth (OIG) over the Performance Period as compared to the OIG of the companies in the S&P 100 Industrials Index and the Class I Railroads.
2026 proxy, filed 2026-03-25; February 2025 performance-unit criteria and three-year period · Filed 25/03/2026
▪Based on our three-year average ROIC of 15.9% and our relative OIG at the 52nd percentile, performance stock units for the three-year performance period (2023-2025) ending in 2025 vested at 86% of target
2026 proxy, filed 2026-03-25; actual 2023–2025 performance-unit vesting · Filed 25/03/2026
Our Stock Ownership Guidelines require that the CEO hold at least seven (7) times annual salary and that the other Named Executive Officers hold at least four (4) times annual salary in stock or stock units.
2026 proxy, filed 2026-03-25; executive stock-ownership requirements · Filed 25/03/2026
We do not include the following types of equity interests when calculating stock ownership under these guidelines: (i) unexercised stock options, (ii) unvested retention or performance shares or units, and (iii) any investment in the Company stock fund under the Thrift Plan, the Supplemental Thrift Plan or the Executive Incentive Deferral Plan.
2026 proxy, filed 2026-03-25; equity excluded from ownership-compliance calculations · Filed 25/03/2026
As of December 31, 2025, all of the Named Executive Officers were in compliance with stock ownership requirements.
2026 proxy, filed 2026-03-25; actual NEO ownership compliance as of December 31, 2025 · Filed 25/03/2026
At September 30, 2026, outstanding stock options are not subject to performance or market-based vesting conditions.
September 2026 Form 10-Q, filed 2026-10-22; outstanding options lack performance or market vesting conditions · Filed 22/10/2026
▪W Anthony Will was elected to the Board effective January 5, 2026
Board
Leadership and
Board
Committees
▪Independent Board Chairman
▪Four Board Committees - Audit Committee, Compensation and Talent Committee, Corporate Governance, Nominating and Sustainability Committee, and Finance Committee - composed solely of independent directors
2026 proxy, filed 2026-03-25; independent chairman and independent standing committees · Filed 25/03/2026
▪Executive Sessions of Independent Directors at each Board and Committee Meeting
2026 proxy, filed 2026-03-25; independent-director executive sessions · Filed 25/03/2026
▪Annual Evaluation of Board and Committee performance
Governance
Practices and
Oversight
▪Annual Election of Directors with Majority Voting Standard
▪“Proxy Access” Right
▪Board Strategic Oversight and Review of Enterprise Risk Management
2026 proxy, filed 2026-03-25; annual evaluations, majority voting, proxy access and risk oversight · Filed 25/03/2026
During 2025, the Board met 12 times.
2026 proxy, filed 2026-03-25; actual 2025 Board meeting count · Filed 25/03/2026
None of the directors attended fewer than 75% of the aggregate number of meetings of the Board and the Committees on which he or she served.
2026 proxy, filed 2026-03-25; actual director attendance · Filed 25/03/2026
The Shareholders approved, on an advisory (non-binding) basis, the compensation of the Company’s Named Executive Officers, by the following count:
Votes For
Votes Against
Abstentions
Broker Non-Votes
454,118,030
24,436,114
2,241,179
58,075,071
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
Annual-meeting results Form 8-K, filed 2026-05-18; actual non-binding shareholder approval of NEO compensation · Filed 18/05/2026
