UNION PACIFIC CORP

Previous wording

Three and Nine Months Ended September 30, 2024, Compared to

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Three months ended March 31, 2025, compared to

Previous wording

The preparation of these financial statements requires estimation and judgment that affect the reported amounts of revenues, expenses, assets, and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. If these estimates differ materially from actual results, the impact on the Condensed Consolidated Financial Statements may be material. Our critical accounting estimates are available in Item 7 of our 2023 Annual Report on Form 10-K. During the first nine months of 2024, there have not been any significant changes with respect to our critical accounting estimates.

Current wording

The preparation of these financial statements requires estimation and judgment that affect the reported amounts of revenues, expenses, assets, and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. If these estimates differ materially from actual results, the impact on the Condensed Consolidated Financial Statements may be material. Our critical accounting estimates are available in Item 7 of our 2024 Annual Report on Form 10-K. During the first three months of 2025, there have not been any significant changes with respect to our critical accounting estimates.

Previous wording

The Company reported earnings of $2.75 per diluted share on net income of $1.7 billion and an operating ratio of 60.3% in the third quarter of 2024 compared to earnings of $2.51 per diluted share on net income of $1.5 billion and an operating ratio of 63.4% for the third quarter of 2023. Freight revenues increased 4% in the third quarter of 2024 compared to the same period in 2023 driven by 6% volume increase and core pricing gains, partially offset by negative mix (for example, a relative increase in international intermodal shipments, which have a lower average revenue per car (ARC)) and lower fuel surcharge revenues. Volume increases were primarily driven by international intermodal and grain, partially offset by weaker demand for coal and rock shipments.

Current wording

The Company reported earnings of $2.70 per diluted share on net income of $1.6 billion and an operating ratio of 60.7% in the first quarter of 2025 compared to earnings of $2.69 per diluted share on net income of $1.6 billion and an operating ratio of 60.7% for the first quarter of 2024. Freight revenues increased 1% in the first quarter of 2025 compared to the same period in 2024 driven by a 7% volume increase and core pricing gains, largely offset by unfavorable business mix (for example, a relative increase in international intermodal shipments, which have a lower average revenue per car (ARC)), lower fuel surcharge revenues, and one less day due to leap year in 2024. Volume increases were primarily driven by international intermodal and coal, partially offset by weaker demand for automotive and decreased petroleum product shipments.

Previous wording

Operating expenses decreased 2% compared to the third quarter of 2023 due to productivity, lower fuel prices, and a 2023 write-off. These decreases were partially offset by inflation, volume-related costs, and higher depreciation. Operating income of $2.4 billion increased 11%, and our operating ratio of 60.3% improved 3.1 points from the third quarter of 2023.

Current wording

Operating expenses decreased slightly compared to the first quarter of 2024 due to productivity and lower fuel prices. These decreases were partially offset by volume-related costs, inflation, and higher depreciation. Operating income of $2.4 billion and operating ratio of 60.7% remained unchanged from last year, despite the business mix, fuel price impact, and having one less day in 2025.

Previous wording

We generate freight revenues by transporting products from our three commodity groups. Freight revenues vary with volume (carloads) and ARC. Changes in price, traffic mix, and fuel surcharges drive ARC. Customer incentives, which are primarily provided for shipping to/from specific locations or based on cumulative volumes, are recorded as a reduction to operating revenues. Customer incentives that include variable consideration based on cumulative volumes are estimated using the expected value method, which is based on available historical, current, and forecasted volumes, and recognized as the related performance obligation is satisfied. We recognize freight revenues over time as shipments move from origin to destination. The allocation of revenues between reporting periods is based on the relative transit time in each reporting period with expenses recognized as incurred.

Current wording

We generate freight revenues by transporting products from our three commodity groups. Freight revenues vary with volumes (carloads) and ARC. Changes in price, traffic mix, and fuel surcharges drive ARC. Customer incentives, which are primarily provided for shipping to/from specific locations or based on cumulative volumes, are recorded as a reduction to operating revenues. Customer incentives that include variable consideration based on cumulative volumes are estimated using the expected value method, which is based on available historical, current, and forecasted volumes, and recognized as the related performance obligation is satisfied. We recognize freight revenues over time as shipments move from origin to destination. The allocation of revenues between reporting periods is based on the relative transit time in each reporting period with expenses recognized as incurred.

Previous wording

Freight revenues increased 4% in the third quarter of 2024 compared to the same period in 2023 driven by a 6% volume increase and core pricing gains, partially offset by negative mix (for example, a relative increase in international intermodal shipments, which have a lower ARC) and lower fuel surcharge revenues. Volume increases were primarily driven by international intermodal and grain, partially offset by weaker demand for coal and rock shipments.

Current wording

Freight revenues increased 1% in the first quarter of 2025 compared to the same period in 2024 driven by a 7% increase in volumes and core pricing gains, largely offset by unfavorable business mix (for example, a relative increase in international intermodal shipments, which have a lower ARC), lower fuel surcharge revenues, and one less day due to leap year in 2024. Volume increases were primarily driven by international intermodal and coal, partially offset by weaker demand for automotive and decreased petroleum product shipments.

Previous wording

Each of our commodity groups includes revenues from fuel surcharges. Freight revenues from fuel surcharge programs decreased $2 million to $635 million in the third quarter of 2024 compared to $637 million in the same period of 2023 due to lower fuel prices, partially offset by the lag impact on fuel prices (it can generally take up to two months for changing fuel prices to affect fuel surcharge recoveries), and higher volume.

Current wording

Each of our commodity groups includes revenues from fuel surcharges. Freight revenues from fuel surcharge programs decreased $100 million to $565 million in the first quarter of 2025 compared to $665 million in the same period of 2024 due to lower fuel prices and the lag impact on fuel prices (it can generally take up to two months for changing fuel prices to affect fuel surcharge recoveries), partially offset by higher volumes.

Previous wording

Other subsidiary revenues decreased in the third quarter and nine-month periods of 2024 compared to 2023 primarily driven by a weaker demand for intermodal shipments at our subsidiary that brokers intermodal and transload logistics services and the partial transfer of our commuter operations to Metra. Accessorial revenues decreased in the third quarter and nine-month periods of 2024 compared to 2023 driven by lower intermodal accessorial revenues as a result of our intermodal equipment sale. In addition, the year-to-date period was positively impacted by a one-time contract settlement in the first quarter of 2024.

Current wording

Other subsidiary revenues decreased in the first quarter of 2025 compared to 2024 primarily driven by the partial transfer of our commuter operations to Metra and a weaker demand for intermodal shipments at our subsidiary that brokers intermodal and transload logistics services. Accessorial revenues decreased in the first quarter of 2025 compared to 2024 driven by lower intermodal accessorial revenues as a result of our intermodal equipment sale and a one-time contract settlement recognized in the first quarter of 2024.

Previous wording

Industrial– Industrial includes shipments of industrial chemicals and plastics, metals and minerals, forest products, and energy and specialized markets. Freight revenues from industrial shipments increased in the third quarter and nine-month periods of 2024 compared to 2023 due to core pricing gains and positive mix of traffic from decreased short haul rock shipments and higher soda ash shipments, partially offset by volume declines and lower fuel surcharge revenues. Volume decreases in both periods of 2024 compared to 2023 were driven by lower demand for rock, due to weather, high inventories, and softness in Southern markets, partially offset by strength in petroleum, plastics, and industrial chemicals.

Current wording

Industrial – Industrial includes shipments of industrial chemicals and plastics, metals and minerals, forest products, and energy and specialized markets. Freight revenues from industrial shipments decreased in the first quarter of 2025 compared to 2024 due to business mix from decreased soda ash and lumber shipments, lower fuel surcharge revenues, and volume declines, partially offset by core pricing gains. Volume decreases in first quarter of 2025 compared to 2024 were driven by decreased shipments of petroleum due to business losses, a weaker global soda ash market, and a soft housing market along with ongoing tariff uncertainties that drove declines in lumber. Partially offsetting some of the volume declines was strength in rock, industrial chemicals, and plastics.

Previous wording

Premium – Premium includes shipments of finished automobiles, automotive parts, and merchandise in intermodal containers, both domestic and international. Premium freight revenues increased in the third quarter and nine-month periods of 2024 compared to 2023 due to increased volume and core pricing gains, partially offset by lower fuel surcharge revenues and negative mix. In the third quarter of 2024, international intermodal experienced heavy demand due to increased U.S. West Coast imports, a result of freight shifted from the East Coast and Canadian ports due to uncertainty related to labor negotiations, driving volume up 33% compared to the third quarter 2023. In addition, business development efforts in domestic intermodal drove volume growth in both periods of 2024 compared to 2023. Finished automotive shipments increased in the year-to-date period of 2024 compared to 2023 driven by business development wins, partially offset by unplanned production decreases.

Current wording

Premium – Premium includes shipments of finished automobiles, automotive parts, and merchandise in intermodal containers, both domestic and international. Premium freight revenues increased in the first quarter of 2025 compared to 2024 due to a 13% rise in volume and core pricing gains, partially offset by business mix and lower fuel surcharge revenues. The volume increase was primarily due to continued elevated U.S. West Coast imports in the first quarter of 2025, reflecting a 33% increase compared to the first quarter of 2024. In addition, business development efforts in domestic intermodal contributed to year-over-year volume growth. Automotive shipments decreased in the first quarter of 2025 compared to 2024 due to reduced production and tariff uncertainties, which offset some of the volume gains from intermodal shipments.

Previous wording

Mexico Business– Each of our commodity groups includes revenues from shipments to and from Mexico. Revenues from Mexico business increased 7% to $724 million in the third quarter of 2024 compared to 2023 driven by a 2% volume increase and a 5% increase in ARC. Year-to-date, revenues from Mexico business increased 9% compared to the same period in 2023 driven by a 4% volume increase and a 5% increase in ARC. Volume increases in both periods were driven by higher grain, partially offset by lower automotive parts shipments. In addition, increased finished automotive shipments contributed to the year-to-date volume growth.

Current wording

Mexico business – Freight revenues from each of our commodity groups includes revenues from shipments to and from Mexico, which decreased 9% to $719 million in the first quarter of 2025 compared to 2024 driven by a 5% volume decline and a 4% decrease in ARC. Volume declines were driven by lower automotive shipments in both parts and finished vehicles.

Previous wording

Compensation and Benefits – Compensation and benefits include wages, payroll taxes, health and welfare costs, pension costs, and incentive costs. For the third quarter of 2024, expense increased 2% compared to 2023 due to wage inflation, partially offset by lower employee levels. Year-to-date expense was flat as the 2023 labor agreement ratification charge and lower employee levels in 2024 offset wage inflation and increased crew needs associated with labor agreements and volume.

Current wording

Compensation and benefits – Compensation and benefits include wages, payroll taxes, health and welfare costs, pension costs, and incentive costs. For the first quarter of 2025, expense decreased 1% compared to 2024 due to lower employee levels, partially offset by wage inflation.

Previous wording

Purchased Services and Materials – Expense for purchased services and materials includes the costs of services purchased from outside contractors and other service providers (including equipment maintenance and contract expense incurred by our subsidiaries for external transportation services); materials used to maintain the Railroad’s lines, structures, and equipment; costs of operating facilities jointly used by UPRR and other railroads; transportation and lodging for train crew employees; trucking and contracting costs for intermodal containers; leased automobile maintenance expense; and tools and supplies. Purchased services and materials decreased 4% in both periods of 2024 compared to 2023, primarily due to declines in our active locomotive fleet as productivity improved in both periods and decreased volume-related drayage cost incurred at one of our subsidiaries, partially offset by inflation and volume-related costs. In addition, the year-to-date period was positively impacted by a contract settlement.

Current wording

Purchased services and materials – Expense for purchased services and materials includes the costs of services purchased from outside contractors and other service providers (including equipment maintenance and contract expense incurred by our subsidiaries for external transportation services); materials used to maintain the Railroad’s lines, structures, and equipment; costs of operating facilities jointly used by UPRR and other railroads; transportation and lodging for train crew employees; trucking and contracting costs for intermodal containers; leased automobile maintenance expense; and tools and supplies. Purchased services and materials increased 3% in the first quarter of 2025 compared to 2024, driven by inflation, volume-related costs (including an increase in our active locomotive fleet), and a 2024 favorable contract settlement, partially offset by decreased volume-related drayage costs incurred at one of our subsidiaries.

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Depreciation – The majority of depreciation relates to road property, including rail, ties, ballast, and other track material. Depreciation expense was up 4% for both periods of 2024 compared to 2023, driven by a higher depreciable asset base.

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Depreciation – The majority of depreciation relates to road property, including rail, ties, ballast, and other track material. Depreciation expense was up 3% for the first quarter of 2025 compared to 2024, driven by a higher depreciable asset base.

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Fuel – Fuel includes locomotive fuel and gasoline for highway and non-highway vehicles and heavy equipment. Fuel expense decreased in the third quarter of 2024 compared to the same period in 2023 driven by a decrease in locomotive diesel fuel prices, partially offset by an increase in gross ton-miles and a 1% increase in the fuel consumption rate (computed as gallons of fuel consumed divided by gross ton-miles in thousands). Locomotive diesel fuel prices averaged $2.60 and $3.12 per gallon (including taxes and transportation costs) in the third quarter of 2024 and 2023, respectively. Year-to-date, fuel expense decreased driven by lower locomotive diesel fuel prices, which averaged $2.71 compared to $3.07 per gallon in the same period of 2023, and a slight improvement in the fuel consumption rate, partially offset by increased gross ton-miles.

Current wording

Fuel– Fuel includes locomotive fuel and gasoline for highway and non-highway vehicles and heavy equipment. Fuel expense decreased in the first quarter of 2025 compared to the same period in 2024 driven by a decrease in locomotive diesel fuel prices and a 1% improvement in the fuel consumption rate (computed as gallons of fuel consumed divided by gross ton-miles in thousands), partially offset by an increase in gross ton-miles. Locomotive diesel fuel prices averaged $2.51 and $2.81 per gallon (including taxes and transportation costs) in the first quarter of 2025 and 2024, respectively.

Previous wording

Equipment and Other Rents – Equipment and other rents expense primarily includes rental expense that the Railroad pays for freight cars owned by other railroads or private companies; freight car, intermodal, and locomotive leases; and office and other rent expense, offset by equity income from certain equity method investments. Equipment and other rents expense increased 1% in the third quarter of 2024 compared to 2023, driven by inflation and increased demand in commodities utilizing freight cars owned by others, partially offset by lower lease expense. Year-to-date expense decreased 6% compared to the same period of 2023, driven by lower lease expense and improved cycle times, partially offset by increased demand in commodities utilizing freight cars owned by others and inflation.

Current wording

Equipment and other rents – Equipment and other rents expense primarily includes rental expense that the Railroad pays for freight cars owned by other railroads or private companies; freight car, intermodal, and locomotive leases; and office and other rent expense, offset by equity income from certain equity method investments. Equipment and other rents expense increased 12% in the first quarter of 2025 compared to 2024, driven by increased car hire for auto racks, inflation, and increased demand in business (mainly intermodal) utilizing freight cars owned by others, partially offset by a reduction in equipment leases.

Previous wording

Other – Other expense includes state and local taxes; freight, equipment, and property damage; utilities; insurance; personal injury; environmental remediation; employee travel; telephone and cellular; computer software; bad debt; and other general expenses. Other expense decreased 6% and 4% in the third quarter and nine-month period of 2024 compared to 2023, respectively, driven by lower personal injury costs and a 2023 write-off, partially offset by higher freight loss and damage, and other casualty costs. Additionally, year-to-date expense was lower due to a gain on the sale of intermodal equipment in the second quarter of 2024.

Current wording

Other– Other expense includes state and local taxes; freight, equipment, and property damage; utilities; insurance; personal injury; environmental remediation; employee travel; telephone and cellular; computer software; bad debt; and other general expenses. Other expense increased 1% in the first quarter of 2025 compared to 2024, driven by higher costs associated with destroyed equipment, partially offset by lower bad debt expense and environmental remediation costs.

Previous wording

Other Income, net– Other income decreased in the third quarter of 2024 compared to 2023 driven by lower real estate income. Year-to-date, other income decreased due to a one-time $107 million real estate transaction in 2023, partially offset by interest received in 2024 from the IRS on refund claims.

Current wording

Other income, net – Other income decreased in the first quarter of 2025 compared to 2024. See Note 6 to the Condensed Consolidated Financial Statements, Item 1, for additional detail.

Previous wording

We report a number of key performance measures weekly to the Surface Transportation Board (STB). We provide these on our website athttps://investor.unionpacific.com/key-performance-metrics.

Current wording

We report a number of key performance measures weekly to the Surface Transportation Board (STB). We provide these on our website at https://investor.unionpacific.com/key-performance-metrics.

Previous wording

Gross and Revenue Ton-Miles – Gross ton-miles are calculated by multiplying the weight of loaded and empty freight cars by the number of miles hauled. Revenue ton-miles are calculated by multiplying the weight of freight by the number of tariff miles. Gross ton-miles and revenue ton-miles increased 4% and 1%, respectively, in the third quarter of 2024 compared to 2023, while carloadings increased 6% in the third quarter of 2024 compared to 2023. For the year-to-date periods, gross ton-miles increased 1% and revenue ton-miles decreased 1%, while carloadings were up 2% year-over-year. Changes in commodity mix drove the year-over-year variances between gross ton-miles, revenue ton-miles, and carloads due to lower coal shipments, which are generally heavier, and increased international intermodal shipments that are generally lighter.

Current wording

Gross and revenue ton-miles – Gross ton-miles are calculated by multiplying the weight of loaded and empty freight cars by the number of miles hauled. Revenue ton-miles are calculated by multiplying the weight of freight by the number of rate miles. Both gross ton-miles and revenue ton-miles increased 3%, in the first quarter of 2025 compared to 2024, while carloadings increased 7% in the first quarter of 2025 compared to 2024. Changes in business mix drove the year-over-year variances between gross ton-miles, revenue ton-miles, and carloads due to increased international intermodal shipments that are generally lighter.

Previous wording

Freight Car Velocity – Freight car velocity measures the average daily miles per car on our network. The two key drivers of this metric are the speed of the train between terminals (average train speed) and the time a rail car spends at the terminals (average terminal dwell time). Freight car velocity increased 5% and 3% in the third quarter and nine-month periods of 2024 compared to 2023, respectively, driven by improvements in terminal dwell.

Current wording

Freight car velocity – Freight car velocity measures the average daily miles per car on our network. The two key drivers of this metric are the speed of the train between terminals (average train speed) and the time a rail car spends at the terminals (average terminal dwell time). Freight car velocity increased 6% in the first quarter of 2025 compared to 2024 driven by a 6% improvement in terminal dwell.

Previous wording

Locomotive Productivity – Locomotive productivity is gross ton-miles per average daily locomotive horsepower available. Locomotive productivity increased 5% and 7% in the third quarter and nine-month periods of 2024, respectively, compared to 2023 driven by improved network fluidity and asset utilization. Throughout the year, we maintained a buffer to flex the fleet size as we experienced and subsequently recovered from certain weather events and reacted to varying volume levels.

Current wording

Locomotive productivity – Locomotive productivity is gross ton-miles per average daily locomotive horsepower available. Locomotive productivity increased 1% in the first quarter of 2025 compared to 2024 driven by improved network fluidity and asset utilization despite the increase in active fleet to handle the additional volumes.

Previous wording

Train Length – Train length is the average maximum train length on a route measured in feet. Our train length increased slightly and 1% in the third quarter and nine-month periods of 2024 compared to 2023, respectively, due to train length improvement initiatives and increases in international intermodal shipments, which generally move on longer trains, partially offset by declines in coal train length.

Current wording

Train length – Train length is the average maximum train length on a route measured in feet. Our train length increased 2% in the first quarter of 2025 compared to 2024 due to train length improvement initiatives and increases in international intermodal shipments.

Previous wording

Service Performance Index (SPI) – SPI is a ratio of the service customers are currently receiving relative to the best monthly performance over the last three years. Measuring our performance relative to a historical benchmark demonstrates our focus on continuously improving service for our customers, and we believe it is a better indicator of service performance than the previously disclosed trip plan compliance. SPI does not replace the service commitments we have contractually agreed to with a small number of customers. Our SPI is calculated for intermodal and manifest/automotive products. Intermodal SPI improved 1 and 5 points in the third quarter and nine-month periods of 2024 compared to 2023, respectively, at the same time as international volume surged. Manifest/automotive SPI improved 5 and 4 points in the third quarter and nine-month periods of 2024 compared to 2023, respectively. The year-to-date period improved in 2024 compared to 2023 despite the impact of 2024 weather events.

Current wording

Service performance index (SPI) – SPI is a ratio of the service customers are currently receiving relative to the best monthly performance over the last three years. Measuring our performance relative to a historical benchmark demonstrates our focus on continuously improving service for our customers. Our SPI is calculated for intermodal and manifest products. Intermodal SPI was essentially flat in the first quarter of 2025 compared to 2024, while handling 18% more volume. Manifest SPI improved 6 points in the first quarter of 2025 compared to 2024 driven by improved network fluidity.

Previous wording

Workforce Productivity–* *Workforce productivity is average daily car miles per employee. Workforce productivity improved 12% and 6% in the third quarter and nine-month periods of 2024, respectively, as average daily car miles increased 6% and 2% and employees decreased 5% and 4%, respectively, compared to 2023. In the third quarter and year-to-date periods, our active TE&Y workforce increased to support carload demand and increased crew needs associated with labor agreements that went into effect in third quarter of 2023. In addition, we are maintaining an adequate training pipeline to provide a capacity buffer to enable responsiveness in an ever-changing demand and operating environment.

Current wording

Workforce productivity – Workforce productivity is average daily car miles per employee. Workforce productivity improved 9% in the first quarter of 2025 as average daily car miles increased 6% and employees decreased 3% compared to 2024. In the first quarter of 2025, we continued to adjust our active train, engine, and yard (TE&Y) workforce to enable responsiveness in an ever-changing demand and operating environment. As a result, we were able to handle 7% more volume with 1% fewer active TE&Y employees.

Previous wording

Operating Ratio – Operating ratio is our operating expenses reflected as a percentage of operating revenues. Our operating ratio of 60.3% improved 3.1 points in the third quarter of 2024 compared to 2023 and our year-to-date operating ratio of 60.4% improved 2.4 points compared to 2023 driven by productivity initiatives, core pricing gains, and the year-over-year impact from lower fuel prices, partially offset by inflation and other costs. In addition, the year-to-date period was positively impacted by 2024 contract settlements, a 2024 gain on the sale of intermodal equipment, and the 2023 labor agreement ratification charge.

Current wording

Operating ratio – Operating ratio is our operating expenses reflected as a percentage of operating revenues. Our operating ratio of 60.7% for the first quarter of 2025 was consistent with 2024 driven by core pricing gains and productivity initiatives, offset by the year-over-year impact of the business mix, inflation, the year-over-year impact from lower fuel prices, and other costs.

Previous wording

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 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, 2024, and December 31, 2023, the incremental borrowing rate on operating leases was 3.7% and 3.6%, respectively. Pension and OPEB were funded at September 30, 2024, and December 31, 2023.

Current wording

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 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 both March 31, 2025, and December 31, 2024, the incremental borrowing rate on operating leases was 3.8%. Pension and OPEB were funded at March 31, 2025, and December 31, 2024.

Previous wording

Cash used in investing activities decreased in the first nine months of 2024 compared to the same period of 2023 driven by higher proceeds from asset sales, including a sale of intermodal equipment.

Current wording

Cash used in investing activities increased in the first three months of 2025 compared to the same period of 2024 driven by the timing of capital investments.

Previous wording

In 2024, we expect our capital plan to be approximately $3.4 billion, down 8% from 2023. Roughly half of the year-over-year decrease is attributable to the 2023 purchase of a small trucking and transload operator and related real estate assets. We plan to continue to make investments to support our growth strategy, harden our infrastructure, replace older assets, and improve the safety and resiliency of the network. In addition, the plan includes investments in growth-related projects to drive more carloads to the network, certain ramps to efficiently handle volumes from intermodal customers, continued modernization of our locomotive fleet, and projects intended to improve operational efficiency. The capital plan may be revised if business conditions warrant or if laws or regulations affect our ability to generate sufficient returns on these investments.

Current wording

In 2025, we expect our capital plan to be approximately $3.4 billion, consistent with 2024. We plan to continue to make investments to support our growth strategy, improve the safety, resiliency, and operational efficiency of the network, harden our infrastructure, and replace older assets, including modernization of our locomotive fleet and acquiring freight cars to support replacement and growth opportunities. In addition, the plan includes investments in growth-related projects to drive more carloads to the network and enhance productivity. This includes siding construction and extension projects, terminal investments supporting our manifest network, and investments in certain ramps to efficiently handle volumes from new and existing intermodal customers. The capital plan may be revised if business conditions warrant or if laws or regulations affect our ability to generate sufficient returns on these investments.

Previous wording

Cash used in financing activities increased in the first nine months of 2024 compared to the same period of 2023 driven by a decrease in debt issued and an increase in share repurchases.

Current wording

Cash used in financing activities decreased in the first three months of 2025 compared to the same period of 2024 driven by an increase of debt issued and less debt repaid, partially offset by more share repurchases, including entering into accelerated share repurchase programs.

Previous wording

See Note 14 of the Condensed Consolidated Financial Statements for a description of all our outstanding financing arrangements and significant new borrowings and Note 16 of the Condensed Consolidated Financial Statements for a description of our share repurchase programs.

Current wording

See Note 13 of the Condensed Consolidated Financial Statements, Item 1, for a description of all our outstanding financing arrangements and significant new borrowings and Note 15 of the Condensed Consolidated Financial Statements, Item 1, for a description of our share repurchase programs.

Previous wording

During the third quarter of 2024, we generated $2.7 billion of cash provided by operating activities, repurchased $738 million worth of shares under our share repurchase programs, and paid our quarterly dividend. On September 30, 2024, we had $947 million of cash and cash equivalents, $2.0 billion of credit available under our revolving credit facility, and $800 million undrawn on the Receivables Facility. We have been, and we expect to continue to be, in compliance with our debt covenants.

Current wording

During the first quarter of 2025, we generated $2.2 billion of cash provided by operating activities, paid our quarterly dividend, and repurchased $1.4 billion worth of shares under our share repurchase programs, including entering into accelerated share repurchase programs for $1.5 billion ($1.2 billion assigned to the initial delivery of shares). On March 31, 2025, we had $1.4 billion of cash and cash equivalents, $2.0 billion of credit available under our revolving credit facility, and up to $800 million undrawn on the Receivables Facility. In January 2025, we redeemed all $350 million of outstanding 3.25% notes due January 15, 2025. In February 2025, we issued $2.0 billion of debt (see Note 13 to the Condensed Consolidated Financial Statements, Item 1). We have been, and we expect to continue to be, in compliance with our debt covenants.

Previous wording

The following table identifies material obligations as of September 30, 2024:

Current wording

The following table identifies material contractual obligations as of March 31, 2025:

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Asserted and Unasserted Claims – See Note 15 to the Condensed Consolidated Financial Statements.

Current wording

Asserted and unasserted claims – See Note 14 to the Condensed Consolidated Financial Statements, Item 1.

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Indemnities – See Note 15 to the Condensed Consolidated Financial Statements.

Current wording

Indemnities – See Note 14 to the Condensed Consolidated Financial Statements, Item 1.

Previous wording

Certain statements in this report, and statements in other reports or information filed or to be filed with the SEC (as well as information included in oral statements or other written statements made or to be made by us), are, or will be, forward-looking statements as defined by the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements and information include, without limitation, statements and information set forth under the captions “Liquidity and Capital Resources” regarding our capital plan, share repurchase programs, contractual obligations, and "Other Matters" in this Item 2 of Part I. Forward-looking statements and information also include any other statements or information in this report (including information incorporated herein by reference) regarding: potential impacts of public health crises, including pandemics, epidemics, and the outbreak of other contagious disease, such as the coronavirus and its variant strains (COVID); the Russia-Ukraine and Israel-Hamas wars and other geopolitical tensions in the middle east, and any impacts on our business operations, financial results, liquidity, and financial position, and on the world economy (including customers, employees, and supply chains), including as a result of fluctuations in volume and carloadings; closing of customer manufacturing, distribution or production facilities; expectations as to operational or service improvements; expectations as to hiring challenges; availability of employees; expectations regarding the effectiveness of steps taken or to be taken to improve operations, service, infrastructure improvements, and transportation plan modifications (including those discussed in response to increased traffic); expectations as to cost savings, revenue growth, and earnings; the time by which goals, targets, or objectives will be achieved; projections, predictions, expectations, estimates, or forecasts as to our business, financial, and operational results, future economic performance, and general economic conditions; proposed new products and services; estimates of costs relating to environmental remediation and restoration; estimates and expectations regarding tax matters; expectations that claims, litigation, environmental costs, commitments, contingent liabilities, labor negotiations or agreements, cyber-attacks or other matters will not have a material adverse effect on our consolidated results of operations, financial condition, or liquidity and any other similar expressions concerning matters that are not historical facts. Forward-looking statements may be identified by their use of forward-looking terminology, such as “believes,” “expects,” “may,” “should,” “would,” “will,” “intends,” “plans,” “estimates,” “anticipates,” “projects” and similar words, phrases, or expressions.

Current wording

Certain statements in this report, and statements in other reports or information filed or to be filed with the SEC (as well as information included in oral statements or other written statements made or to be made by us), are, or will be, forward-looking statements as defined by the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements and information include, without limitation, statements and information set forth under the captions “Liquidity and Capital Resources” regarding our capital plan, share repurchase programs, contractual obligations, and "Other Matters" in this Item 2 of Part I. Forward-looking statements and information also include any other statements or information in this report (including information incorporated herein by reference) regarding: potential impacts of public health crises, including pandemics, epidemics, and the outbreak of other contagious disease, such as the coronavirus and its variant strains (COVID); the Russia-Ukraine and Israel-Hamas wars and other geopolitical tensions in the Middle East, and any impacts on our business operations, financial results, liquidity, and financial position, and on the world economy (including customers, employees, and supply chains), including as a result of fluctuations in volumes and carloadings; closing of customer manufacturing, distribution or production facilities; expectations as to operational or service improvements; expectations as to hiring challenges; availability of employees; expectations regarding the effectiveness of steps taken or to be taken to improve operations, service, infrastructure improvements, and transportation plan modifications (including those discussed in response to increased traffic); expectations as to cost savings, revenue growth, and earnings; the time by which goals, targets, aspirations, or objectives will be achieved; projections, predictions, expectations, estimates, or forecasts as to our business, financial, and operational results, future economic performance, and general economic conditions; proposed new products and services; estimates of costs relating to environmental remediation and restoration; estimates and expectations regarding tax matters; estimates and expectations regarding current or potential tariffs; expectations that claims, litigation, environmental costs, commitments, contingent liabilities, labor negotiations or agreements, cyber-attacks or other matters will not have a material adverse effect on our consolidated results of operations, financial condition, or liquidity and any other similar expressions concerning matters that are not historical facts. Forward-looking statements may be identified by their use of forward-looking terminology, such as “believes,” “expects,” “may,” “should,” “would,” “will,” “intends,” “plans,” “estimates,” “anticipates,” “projects,” and similar words, phrases, or expressions.

Previous wording

Our Internet website is www.up.com. We make available free of charge on our website (under the “Investors” caption link) our Annual Reports on Form 10-K; our Quarterly Reports on Form 10-Q; our current reports on Form 8-K; our proxy statements; Forms 3, 4, and 5, filed on behalf of directors and executive officers; and amendments to such reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the Exchange Act). We provide these reports andstatements as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. We also make available on our website previously filed SEC reports and exhibits via a link to EDGAR on the SEC’s Internet site at www.sec.gov. We provide these previously filed reports as a convenience and their contents reflect only information that was true and correct as of the date of the report. We assume no obligation to update this historical information. Additionally, our corporate governance materials, including By-Laws, Board Committee charters, governance guidelines and policies, and codes of conduct and ethics for directors, officers, and employees are available on our website. From time to time, the corporate governance materials on our website may be updated as necessary to comply with rules issued by the SEC and the New York Stock Exchange or as desirable to promote the effective and efficient governance of our Company. Any security holder wishing to receive, without charge, a copy of any of our SEC filings or corporate governance materials should send a written request to: Secretary, Union Pacific Corporation, 1400 Douglas Street, Omaha, NE 68179.

Current wording

Our Internet website is www.up.com. We make available free of charge on our website (under the “Investors” caption link) our Annual Reports on Form 10-K; our Quarterly Reports on Form 10-Q; our current reports on Form 8-K; our proxy statements; Forms 3, 4, and 5, filed on behalf of directors and certain executive officers; and amendments to such reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the Exchange Act). We provide these reports and statements as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. We also make available on our website previously filed SEC reports and exhibits via a link to EDGAR on the SEC’s Internet site at www.sec.gov. We provide these previously filed reports as a convenience and their contents reflect only information that was true and correct as of the date of the report. We assume no obligation to update this historical information. Additionally, our corporate governance materials, including By-Laws, Board Committee charters, governance guidelines and policies, and codes of conduct and ethics for directors, officers, and employees are available on our website. From time to time, the corporate governance materials on our website may be updated as necessary to comply with rules issued by the SEC and the New York Stock Exchange or as desirable to promote the effective and efficient governance of our Company. Any security holder wishing to receive, without charge, a copy of any of our SEC filings or corporate governance materials should send a written request to: Secretary, Union Pacific Corporation, 1400 Douglas Street, Omaha, NE 68179.