Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 17, 2020 | |
Cover [Abstract] | ||
Document type | 10-Q | |
Document period end date | Jun. 30, 2020 | |
Amendment flag | false | |
Entity registrant name | UNION PACIFIC CORPORATION | |
Entity central index key | 0000100885 | |
Entity current reporting status | Yes | |
Current fiscal year end date | --12-31 | |
Entity filer category | Large Accelerated Filer | |
Document fiscal year focus | 2020 | |
Document fiscal period focus | Q2 | |
Trading Symbol | UNP | |
Entity common stock shares outstanding | 678,838,800 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Address, Address Line One | 1400 Douglas Street | |
Entity Address, City or Town | Omaha | |
Entity Address, Postal Zip Code | 68179 | |
Entity Address, State or Province | NE | |
City Area Code | 402 | |
Local Phone Number | 544-5000 | |
Entity File Number | 1-6075 | |
Entity Tax Identification Number | 13-2626465 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common Stock (Par Value $2.50 per share) | |
Entity Incorporation, State or Country Code | UT | |
Security Exchange Name | NYSE | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Operating revenues: | ||||
Revenue from contract with customer excluding assessed tax | $ 3,972 | $ 5,236 | $ 8,852 | $ 10,246 |
Total operating revenues | 4,244 | 5,596 | 9,473 | 10,980 |
Operating expenses: | ||||
Compensation and benefits | 905 | 1,145 | 1,964 | 2,350 |
Depreciation | 551 | 551 | 1,098 | 1,100 |
Purchased services and materials | 441 | 573 | 962 | 1,149 |
Fuel | 247 | 560 | 681 | 1,091 |
Equipment and other rents | 211 | 260 | 438 | 518 |
Other | 235 | 247 | 533 | 552 |
Total operating expenses | 2,590 | 3,336 | 5,676 | 6,760 |
Operating income | 1,654 | 2,260 | 3,797 | 4,220 |
Other income (Note 6) | 131 | 57 | 184 | 134 |
Interest expense | (289) | (259) | (567) | (506) |
Income before income taxes | 1,496 | 2,058 | 3,414 | 3,848 |
Income taxes | (364) | (488) | (808) | (887) |
Net income | $ 1,132 | $ 1,570 | $ 2,606 | $ 2,961 |
Share and Per Share (Note 8): | ||||
Earnings per share - basic | $ 1.67 | $ 2.23 | $ 3.83 | $ 4.16 |
Earnings per share - diluted | $ 1.67 | $ 2.22 | $ 3.82 | $ 4.15 |
Weighted average number of shares - basic | 677.7 | 705.5 | 681 | 711.2 |
Weighted average number of shares - diluted | 679.2 | 708 | 682.7 | 713.8 |
Cargo and Freight [Member] | ||||
Operating revenues: | ||||
Revenue from contract with customer excluding assessed tax | $ 3,972 | $ 5,236 | $ 8,852 | $ 10,246 |
Other [Member] | ||||
Operating revenues: | ||||
Revenue from contract with customer excluding assessed tax | $ 272 | $ 360 | $ 621 | $ 734 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |||||
Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||||||||
Net income | $ 1,132 | $ 1,570 | $ 2,606 | $ 2,961 | ||||
Other comprehensive income/(loss): | ||||||||
Defined benefit plans | 18 | 82 | 40 | 92 | ||||
Foreign currency translation | (61) | (2) | (56) | 25 | ||||
Total other comprehensive income/(loss) | (43) | [1] | 80 | [1] | (16) | [2] | 117 | [2] |
Comprehensive income | $ 1,089 | $ 1,650 | $ 2,590 | $ 3,078 | ||||
[1] | Net of deferred taxes of ($ 5 ) million and ($ 27 ) million during the three months ended June 30, 2020, and 2019, respectively. | |||||||
[2] | Net of deferred taxes of ($ 12 ) million and ($ 31 ) million during the six months ended June 30, 2020, and 2019, respectively. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Consolidated Statements of Comprehensive Income (Parentheticals) [Abstract] | ||||
Deferred taxes activity other comprehensive income/(loss) | $ (5) | $ (27) | $ (12) | $ (31) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Financial Position - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 2,706 | $ 831 |
Short-term investments (Note 13) | 60 | 60 |
Accounts receivable, net (Note 10) | 1,388 | 1,595 |
Materials and supplies | 668 | 751 |
Other current assets | 261 | 222 |
Total current assets | 5,083 | 3,459 |
Investments | 2,042 | 2,050 |
Net properties (Note 11) | 54,270 | 53,916 |
Operating lease assets (Note 16) | 1,700 | 1,812 |
Other assets | 460 | 436 |
Total assets | 63,555 | 61,673 |
Current liabilities: | ||
Accounts payable and other current liabilities (Note 12) | 3,289 | 3,094 |
Debt due within one year (Note 14) | 1,990 | 1,257 |
Total current liabilities | 5,279 | 4,351 |
Debt due after one year (Note 14) | 26,439 | 23,943 |
Operating lease liabilities (Note 16) | 1,320 | 1,471 |
Deferred income taxes | 12,171 | 11,992 |
Other long-term liabilities | 1,894 | 1,788 |
Commitments and contingencies (Note 17) | ||
Total liabilities | 47,103 | 43,545 |
Common shareholders' equity: | ||
Common shares, $2.50 par value, 1,400,000,000 authorized; 1,112,266,423 and 1,112,014,480 issued; 678,710,739 and 692,100,651 outstanding, respectively | 2,781 | 2,780 |
Paid-in-surplus | 4,135 | 4,523 |
Retained earnings | 49,892 | 48,605 |
Treasury stock | (38,984) | (36,424) |
Accumulated other comprehensive loss (Note 9) | (1,372) | (1,356) |
Total common shareholders' equity | 16,452 | 18,128 |
Total liabilities and common shareholders' equity | $ 63,555 | $ 61,673 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Financial Position (Parentheticals) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Consolidated Statements of Financial Position (Parentheticals) [Abstract] | ||
Common shares, par value | $ 2.50 | $ 2.50 |
Common shares authorized | 1,400,000,000 | 1,400,000,000 |
Common shares issued | 1,112,266,423 | 1,112,014,480 |
Common shares outstanding | 678,710,739 | 692,100,651 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | |
Operating Activities | |||
Net income | $ 1,570 | $ 2,606 | $ 2,961 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Depreciation | 551 | 1,098 | 1,100 |
Deferred and other income taxes | 171 | 209 | |
Other operating activities, net | (9) | 41 | |
Changes in current assets and liabilities: | |||
Accounts receivable, net | 207 | (54) | |
Materials and supplies | 83 | (33) | |
Other current assets | (36) | (85) | |
Accounts payable and other current liabilities | (197) | (185) | |
Income and other taxes | 469 | (54) | |
Cash provided by operating activities | 4,392 | 3,900 | |
Investing Activities | |||
Capital investments | (1,599) | (1,560) | |
Proceeds from asset sales | 107 | 30 | |
Maturities of short-term investments (Note 13) | 75 | 105 | |
Purchases of short-term investments (Note 13) | (75) | (100) | |
Other investing activities, net | 75 | (85) | |
Cash used in investing activities | (1,417) | (1,610) | |
Financing Activities | |||
Debt issued (Note 14) | 4,004 | 2,992 | |
Share repurchase programs (Note 18) | (2,556) | (3,629) | |
Dividends paid | (1,319) | (1,248) | |
Debt repaid | (770) | (604) | |
Net issuance/(repayment) of commercial paper (Note 14) | (1) | 471 | |
Other financing activities, net | (65) | (29) | |
Cash used in financing activities | (1,107) | (2,547) | |
Net change in cash, cash equivalents, and restricted cash | 1,868 | (257) | |
Cash, cash equivalents, restricted cash, beginning balance | 856 | 1,328 | |
Cash, cash equivalents, restricted cash, ending balance | 1,071 | 2,724 | 1,071 |
Non-cash investing and financing activities: | |||
Capital investments accrued but not yet paid | 141 | 136 | |
Common shares repurchased but not yet paid | 19 | 19 | |
Cash (paid for)/received from: | |||
Income taxes, net of refunds | (158) | (717) | |
Interest, net of amounts capitalized | (489) | (504) | |
Reconciliation of cash, cash equivalents, and restricted cash to the Condensed Consolidated Statement of Financial Position | |||
Cash and cash equivalents, at carry value | 1,049 | 2,706 | 1,049 |
Cash, cash equivalents, restricted cash, ending balance | 1,071 | 2,724 | 1,071 |
Accelerated Share Repurchase Agreement [Member] | |||
Financing Activities | |||
Share repurchase programs (Note 18) | (400) | (500) | |
Other Current Assets [Member] | |||
Reconciliation of cash, cash equivalents, and restricted cash to the Condensed Consolidated Statement of Financial Position | |||
Restricted Cash and Cash Equivalents | 10 | 6 | 10 |
Other Noncurrent Assets [Member] | |||
Reconciliation of cash, cash equivalents, and restricted cash to the Condensed Consolidated Statement of Financial Position | |||
Restricted Cash and Cash Equivalents | $ 12 | $ 12 | $ 12 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Changes in Common Shareholders' Equity - USD ($) $ in Millions | Common Shares [Member] | Paid-in-Surplus [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income/(Loss) (Note 9) [Member] | [1] | Total | ||
Shareholders' equity, beginning balance at Dec. 31, 2018 | $ 2,779 | $ 4,449 | $ 45,284 | $ (30,674) | $ (1,415) | $ 20,423 | |||
Common shares, beginning balance at Dec. 31, 2018 | 1,111,700,000 | (386,600,000) | |||||||
Share repurchases (Note 18) (shares) | [2] | (18,149,450) | |||||||
Shareholders' equity, ending balance at Mar. 31, 2019 | $ 2,780 | 3,929 | 46,049 | $ (33,638) | (1,378) | $ 17,742 | |||
Common shares, ending balance at Mar. 31, 2019 | 1,112,000,000 | (403,600,000) | |||||||
Shareholders' equity, beginning balance at Dec. 31, 2018 | $ 2,779 | 4,449 | 45,284 | $ (30,674) | (1,415) | 20,423 | |||
Common shares, beginning balance at Dec. 31, 2018 | 1,111,700,000 | (386,600,000) | |||||||
Net income | 2,961 | 2,961 | |||||||
Other comprehensive income/(loss) | 117 | 117 | [3] | ||||||
Conversion, stock option exercises, forfeitures, and other | $ 1 | 5 | $ 60 | 66 | |||||
Conversion, stock option exercises, forfeitures, and other (shares) | 300,000 | 1,400,000 | |||||||
Share repurchases (Note 18) | (500) | $ (3,648) | $ (4,148) | ||||||
Share repurchases (Note 18) (shares) | (21,900,000) | (21,882,424) | |||||||
Cash dividends declared | (1,248) | $ (1,248) | |||||||
Shareholders' equity, ending balance at Jun. 30, 2019 | $ 2,780 | 3,954 | 46,997 | $ (34,262) | (1,298) | 18,171 | |||
Common shares, ending balance at Jun. 30, 2019 | 1,112,000,000 | (407,100,000) | |||||||
Shareholders' equity, beginning balance at Mar. 31, 2019 | $ 2,780 | 3,929 | 46,049 | $ (33,638) | (1,378) | 17,742 | |||
Common shares, beginning balance at Mar. 31, 2019 | 1,112,000,000 | (403,600,000) | |||||||
Net income | 1,570 | 1,570 | |||||||
Other comprehensive income/(loss) | 80 | 80 | [4] | ||||||
Conversion, stock option exercises, forfeitures, and other | 25 | $ 15 | 40 | ||||||
Conversion, stock option exercises, forfeitures, and other (shares) | 300,000 | ||||||||
Share repurchases (Note 18) | $ (639) | $ (639) | |||||||
Share repurchases (Note 18) (shares) | (3,800,000) | (3,732,974) | |||||||
Cash dividends declared | (622) | $ (622) | |||||||
Shareholders' equity, ending balance at Jun. 30, 2019 | $ 2,780 | 3,954 | 46,997 | $ (34,262) | (1,298) | 18,171 | |||
Common shares, ending balance at Jun. 30, 2019 | 1,112,000,000 | (407,100,000) | |||||||
Shareholders' equity, beginning balance at Dec. 31, 2019 | $ 2,780 | 4,523 | 48,605 | $ (36,424) | (1,356) | $ 18,128 | |||
Common shares, beginning balance at Dec. 31, 2019 | 1,112,000,000 | (419,900,000) | 692,100,651 | ||||||
Share repurchases (Note 18) (shares) | [2] | (14,305,793) | |||||||
Shareholders' equity, ending balance at Mar. 31, 2020 | $ 2,781 | 4,112 | 49,419 | $ (38,992) | (1,329) | $ 15,991 | |||
Common shares, ending balance at Mar. 31, 2020 | 1,112,300,000 | (433,700,000) | |||||||
Shareholders' equity, beginning balance at Dec. 31, 2019 | $ 2,780 | 4,523 | 48,605 | $ (36,424) | (1,356) | $ 18,128 | |||
Common shares, beginning balance at Dec. 31, 2019 | 1,112,000,000 | (419,900,000) | 692,100,651 | ||||||
Net income | 2,606 | $ 2,606 | |||||||
Other comprehensive income/(loss) | (16) | (16) | [3] | ||||||
Conversion, stock option exercises, forfeitures, and other | $ 1 | 12 | $ (4) | 9 | |||||
Conversion, stock option exercises, forfeitures, and other (shares) | 300,000 | 600,000 | |||||||
Share repurchases (Note 18) | (400) | $ (2,556) | $ (2,956) | ||||||
Share repurchases (Note 18) (shares) | (14,300,000) | (14,305,793) | |||||||
Cash dividends declared | (1,319) | $ (1,319) | |||||||
Shareholders' equity, ending balance at Jun. 30, 2020 | $ 2,781 | 4,135 | 49,892 | $ (38,984) | (1,372) | $ 16,452 | |||
Common shares, ending balance at Jun. 30, 2020 | 1,112,300,000 | (433,600,000) | 678,710,739 | ||||||
Shareholders' equity, beginning balance at Mar. 31, 2020 | $ 2,781 | 4,112 | 49,419 | $ (38,992) | (1,329) | $ 15,991 | |||
Common shares, beginning balance at Mar. 31, 2020 | 1,112,300,000 | (433,700,000) | |||||||
Net income | 1,132 | 1,132 | |||||||
Other comprehensive income/(loss) | (43) | (43) | [4] | ||||||
Conversion, stock option exercises, forfeitures, and other | 23 | $ 8 | 31 | ||||||
Conversion, stock option exercises, forfeitures, and other (shares) | 100,000 | ||||||||
Cash dividends declared | (659) | (659) | |||||||
Shareholders' equity, ending balance at Jun. 30, 2020 | $ 2,781 | $ 4,135 | $ 49,892 | $ (38,984) | $ (1,372) | $ 16,452 | |||
Common shares, ending balance at Jun. 30, 2020 | 1,112,300,000 | (433,600,000) | 678,710,739 | ||||||
[1] | AOCI = Accumulated Other Comprehensive Income/(Loss) (Note 9) | ||||||||
[2] | Includes 8,786,380 and 11,795,930 shares repurchased in February 2020 and 2019, respectively, under accelerated share repurchase programs. | ||||||||
[3] | Net of deferred taxes of ($ 12 ) million and ($ 31 ) million during the six months ended June 30, 2020, and 2019, respectively. | ||||||||
[4] | Net of deferred taxes of ($ 5 ) million and ($ 27 ) million during the three months ended June 30, 2020, and 2019, respectively. |
Condensed Consolidated Statem_8
Condensed Consolidated Statements of Changes in Common Shareholders' Equity (Parentheticals) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared per share | $ 0.97 | $ 0.88 | $ 1.94 | $ 1.76 |
Basis Of Presentation
Basis Of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | For purposes of this report, unless the context otherwise requires, all references herein to the “Corporation”, “Company”, “UPC”, “we”, “us”, and “our” mean Union Pacific Corporation and its subsidiaries, including Union Pacific Railroad Company, which will be separately referred to herein as “UPRR” or the “Railroad”. 1. Basis of Presentation Our Condensed Consolidated Financial Statements are unaudited and reflect all adjustments (consisting of normal and recurring adjustments) that are, in the opinion of management, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (GAAP). Pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, this Quarterly Report on Form 10-Q should be read in conjunction with our Consolidated Financial Statements and notes thereto contained in our 2019 Annual Report on Form 10-K. Our Consolidated Statement of Financial Position at December 31, 2019, is derived from audited financial statements. The results of operations for the six months ended June 30, 2020, are not necessarily indicative of the results for the entire year ending December 31, 2020. The Condensed Consolidated Financial Statements are presented in accordance with GAAP as codified in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). |
Accounting Pronouncements
Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Pronouncements [Abstract] | |
Accounting Pronouncements | 2. Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13), Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred credit loss model for an expected credit loss model. Ef fective January 1, 2020, the Company adopted ASU 2016-13 and it did not have a material impact on our consolidated financial position, results of operations, or cash flows. In August 2018, the FASB issued Accounting Standards Update No. 2018-14 (ASU 2018-14), Changes to the Disclosure Requirements for Defined Benefit Plans, which modifies the disclosure requirements for employers that sponsor defined benefit pension and other postretirement plans. The ASU is effective for the Company beginning January 1, 2021, and early adoption is permitted. Adoption of the standard is not expected to have a material impact on the Company’s consolidated financial statement disclosure requirements. |
Operations and Segmentation
Operations and Segmentation | 6 Months Ended |
Jun. 30, 2020 | |
Operations and Segmentation [Abstract] | |
Operations and Segmentation | 3. Operations and Segmentation The Railroad, along with its subsidiaries and rail affiliates, is our one reportable operating segment. Although we provide and analyze revenue by three commodity groups, we treat the financial results of the Railroad as one segment due to the integrated nature of our rail network. Our operating revenues are primarily derived from contracts with customers for the transportation of freight from origin to destination. Prior to 2020, we reported on four commodity groups, thus 2019 freight revenues have been realigned to the new reporting format. The following table represents a disaggregation of our freight and other revenues: Three Months Ended Six Months Ended June 30, June 30, Millions 2020 2019 2020 2019 Bulk $ 1,386 $ 1,678 $ 2,920 $ 3,298 Industrial 1,500 1,937 3,394 3,776 Premium 1,086 1,621 2,538 3,172 Total freight revenues $ 3,972 $ 5,236 $ 8,852 $ 10,246 Other subsidiary revenues 150 219 364 442 Accessorial revenues 103 123 220 256 Other 19 18 37 36 Total operating revenues $ 4,244 $ 5,596 $ 9,473 $ 10,980 Although our revenues are principally derived from customers domiciled in the U.S., the ultimate points of origin or destination for some products we transport are outside the U.S. Each of our commodity groups includes revenue from shipments to and from Mexico. Included in the above table are freight revenues from our Mexico business which amounted to $ 389 million and $ 603 million, respectively, for the three months ended June 30, 2020, and June 30, 2019, and $ 972 million and $ 1,179 million, respectively for the six months ended June 30, 2020, and June 30, 2019 . |
Stock-based Compensation
Stock-based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Stock-based compensation [Abstract] | |
Stock-based Compensation | 4. Stock-Based Compensation We have several stock-based compensation plans under which employees and non-employee directors receive stock options, nonvested retention shares, and nonvested stock units. We refer to the nonvested shares and stock units collectively as “retention awards”. We have elected to issue treasury shares to cover option exercises and stock unit vestings, while new shares are issued when retention shares are granted. Information regarding stock-based compensation appears in the table below: Three Months Ended Six Months Ended June 30, June 30, Millions 2020 2019 2020 2019 Stock-based compensation, before tax: Stock options $ 4 $ 4 $ 8 $ 9 Retention awards 14 20 32 42 Total stock-based compensation, before tax $ 18 $ 24 $ 40 $ 51 Excess tax benefits from equity compensation plans $ 2 $ 6 $ 35 $ 45 Stock Options – We estimate the fair value of our stock option awards using the Black-Scholes option pricing model. The table below shows the annual weighted-average assumptions used for valuation purposes: Weighted-Average Assumptions 2020 2019 Risk-free interest rate 1.5 % 2.5 % Dividend yield 2.1 % 2.2 % Expected life (years) 4.9 5.2 Volatility 23.4 % 22.7 % Weighted-average grant-date fair value of options granted $ 32.20 $ 30.37 The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant; the expected dividend yield is calculated as the ratio of dividends paid per share of common stock to the stock price on the date of grant; the expected life is based on historical and expected exercise behavior; and expected volatility is based on the historical volatility of our stock price over the expected life of the option. A summary of stock option activity during the six months ended June 30, 2020, is presented below: Options (thous.) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (millions) Outstanding at January 1, 2020 3,502 $ 113.38 6.1 yrs. $ 236 Granted 558 176.63 N/A N/A Exercised ( 849 ) 102.61 N/A N/A Forfeited or expired ( 12 ) 150.52 N/A N/A Outstanding at June 30, 2020 3,199 $ 127.13 6.6 yrs. $ 142 Vested or expected to vest at June 30, 2020 3,165 $ 126.74 6.6 yrs. $ 142 Options exercisable at June 30, 2020 2,059 $ 108.52 5.5 yrs. $ 125 Stock options are granted at the closing price on the date of grant, have 10 year contractual terms, and vest no later than 3 years from the date of grant. None of the stock options outstanding at June 30, 2020, are subject to performance or market-based vesting conditions. At June 30, 2020, there was $ 24 million of unrecognized compensation expense related to nonvested stock options, which is expected to be recognized over a weighted-average period of 1 .4 years. Additional information regarding stock option exercises appears in the following table: Three Months Ended Six Months Ended June 30, June 30, Millions 2020 2019 2020 2019 Intrinsic value of stock options exercised $ 17 $ 26 $ 65 $ 164 Cash received from option exercises 18 26 51 98 Treasury shares repurchased for employee taxes ( 4 ) ( 7 ) ( 12 ) ( 29 ) Tax benefit realized from option exercises 3 6 14 40 Aggregate grant-date fair value of stock options vested - - 14 15 Retention Awards – The fair value of retention awards is based on the closing price of the stock on the grant date. Dividends and dividend equivalents are paid to participants during the vesting periods. Changes in our retention awards during the six months ended June 30, 2020, were as follows: Shares (thous.) Weighted-Average Grant-Date Fair Value Nonvested at January 1, 2020 1,898 $ 112.12 Granted 304 185.97 Vested ( 611 ) 76.13 Forfeited ( 36 ) 136.99 Nonvested at June 30, 2020 1,555 $ 140.12 Retention awards are granted at no cost to the employee or non-employee director and vest over periods lasting up to 4 years. At June 30, 2020, there was $ 115 million of total unrecognized compensation expense related to nonvested retention awards, which is expected to be recognized over a weighted-average period of 1.9 years. Performance Retention Awards – In February 2020, our Board of Directors approved performance stock unit grants. The basic terms of these performance stock units are identical to those granted in February 2019, except for different annual return on invested capital (ROIC) performance targets. The plan also includes relative operating income growth (OIG) as a modifier compared to the companies included in the S&P 500 Industrials Index. We define ROIC as net operating profit adjusted for interest expense (including interest on average operating lease liabilities) and taxes on interest divided by average invested capital adjusted for average operating lease liabilities. The modifier can be up to +/- 25% of the award earned based on the ROIC achieved. Stock units awarded to selected employees under these grants are subject to continued employment for 37 months and the attainment of certain levels of ROIC, modified for the relative OIG. We expense the fair value of the units that are probable of being earned based on our forecasted ROIC over the 3 -year performance period, and with respect to the third year of the plan, the relative OIG modifier. We measure the fair value of these performance stock units based upon the closing price of the underlying common stock as of the date of grant, reduced by the present value of estimated future dividends. Dividend equivalents are paid to participants only after the units are earned. The assumptions used to calculate the present value of estimated future dividends related to the February 2020 grant were as follows: 2020 Dividend per share per quarter $ 0.97 Risk-free interest rate at date of grant 1.4 % Changes in our performance retention awards during the six months ended June 30, 2020, were as follows: Shares (thous.) Weighted-Average Grant-Date Fair Value Nonvested at January 1, 2020 929 $ 123.32 Granted 287 166.63 Vested ( 339 ) 102.91 Unearned ( 8 ) 150.42 Forfeited ( 35 ) 138.98 Nonvested at June 30, 2020 834 $ 145.60 At June 30, 2020, there was $ 24 million of total unrecognized compensation expense related to nonvested performance retention awards, which is expected to be recognized over a weighted-average period of 1.4 years. This expense is subject to achievement of the performance measures established for the performance stock unit grants. |
Retirement Plans
Retirement Plans | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Plans [Abstract] | |
Retirement Plans | 5. Retirement Plans Pension and Other Postretirement Benefits Pension Plans – We provide defined benefit retirement income to eligible non-union employees through qualified and non-qualified (supplemental) pension plans. Qualified and non-qualified pension benefits are based on years of service and the highest compensation during the latest years of employment, with specific reductions made for early retirements. Non-union employees hired on or after January 1, 2018 are no longer eligible for pension benefits, but are eligible for an enhanced 401(k) plan. Other Postretirement Benefits (OPEB) – We provide medical and life insurance benefits for eligible retirees hired before January 1, 2004. These benefits are funded as medical claims and life insurance premiums are paid. Expense Both pension and OPEB expense are determined based upon the annual service cost of benefits (the actuarial cost of benefits earned during a period) and the interest cost on those liabilities, less the expected return on plan assets. The expected long-term rate of return on plan assets is applied to a calculated value of plan assets that recognizes changes in fair value over a 5 year period. This practice is intended to reduce year-to-year volatility in pension expense, but it can have the effect of delaying the recognition of differences between actual returns on assets and expected returns based on long-term rate of return assumptions. Differences in actual experience in relation to assumptions are not recognized in net income immediately, but are deferred in accumulated other comprehensive income and, if necessary, amortized as pension or OPEB expense. The components of our net periodic pension cost were as follows: Three Months Ended Six Months Ended June 30, June 30, Millions 2020 2019 2020 2019 Service cost $ 26 $ 22 $ 53 $ 44 Interest cost 35 40 69 80 Expected return on plan assets ( 70 ) ( 68 ) ( 140 ) ( 136 ) Amortization of actuarial loss 24 16 52 32 Net periodic pension cost $ 15 $ 10 $ 34 $ 20 The components of our net periodic OPEB costs were as follows: Three Months Ended Six Months Ended June 30, June 30, Millions 2020 2019 2020 2019 Service cost $ 1 $ 1 $ 1 $ 1 Interest cost 2 2 3 5 Amortization of: Prior service cost ( 4 ) - ( 7 ) - Actuarial loss 2 2 4 3 Net periodic OPEB cost $ 1 $ 5 $ 1 $ 9 On June 30, 2019, the OPEB plan was remeasured to reflect an announced plan amendment effective January 1, 2020 that reduced and eliminated certain medical benefits for Medicare-eligible retirees. This plan amendment resulted in a reduction in the accumulated postretirement benefit obligation of approximately $ 92 million with a corresponding adjustment of $ 69 million in other comprehensive income, net of $ 23 million in deferred taxes. This amount is being amortized as a reduction of future net periodic OPEB cost over approximately 8 years, which represents the future remaining service period of eligible employees . Cash Contributions For the six months ended June 30, 2020, cash contributions totaled $ 0 to the qualified pension plan. Any contributions made during 2020 will be based on cash generated from operations and financial market considerations. Our policy with respect to funding the qualified plans is to fund at least the minimum required by law and not more than the maximum amount deductible for tax purposes. At June 30, 2020, we do not have minimum cash funding requirements for 2020. |
Other Income
Other Income | 6 Months Ended |
Jun. 30, 2020 | |
Other Income [Abstract] | |
Other Income | 6. Other Income Other income included the following: Three Months Ended Six Months Ended June 30, June 30, Millions 2020 2019 2020 2019 Net gain on non-operating asset dispositions [a] $ 83 $ 6 $ 94 $ 10 Rental income 30 33 61 62 Net periodic pension and OPEB costs 11 8 19 16 Interest income 3 6 9 15 Interest income on employment tax refund - 3 - 30 Non-operating environmental costs and other 4 1 1 1 Total $ 131 $ 57 $ 184 $ 134 [a] 2020 includes a $ 69 million gain from a land and permanent easement sale to the Illinois State Toll Highway Authority. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax [Abstract] | |
Income Taxes | 7. Income Taxes UPC is not currently under examination by the Internal Revenue Service (IRS). The statute of limitations has run for all years prior to 2016. Several state tax authorities are examining our state tax returns for years 2015 through 2018. At June 30, 2020, we had a net liability for unrecognized tax benefits of $ 69 million. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 8. Earnings Per Share The following table provides a reconciliation between basic and diluted earnings per share: Three Months Ended Six Months Ended June 30, June 30, Millions, Except Per Share Amounts 2020 2019 2020 2019 Net income $ 1,132 $ 1,570 $ 2,606 $ 2,961 Weighted-average number of shares outstanding: Basic 677.7 705.5 681.0 711.2 Dilutive effect of stock options 0.7 1.3 0.8 1.3 Dilutive effect of retention shares and units 0.8 1.2 0.9 1.3 Diluted 679.2 708.0 682.7 713.8 Earnings per share – basic $ 1.67 $ 2.23 $ 3.83 $ 4.16 Earnings per share – diluted $ 1.67 $ 2.22 $ 3.82 $ 4.15 Stock options excluded as their inclusion would be anti-dilutive 1.0 0.6 0.8 0.5 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income/(Loss) | 6 Months Ended |
Jun. 30, 2020 | |
Accumulated Other Comprehensive Income/(Loss) [Abstract] | |
Accumulated Other Comprehensive Income/(Loss) | 9. Accumulated Other Comprehensive Income/(Loss) Reclassifications out of accumulated other comprehensive income/(loss) for the three and six months ended June 30, 2020, and 2019, were as follows (net of tax): Millions Defined benefit plans Foreign currency translation Total Balance at April 1, 2020 $ ( 1,128 ) $ ( 201 ) $ ( 1,329 ) Other comprehensive income/(loss) before reclassifications 1 ( 61 ) ( 60 ) Amounts reclassified from accumulated other comprehensive income/(loss) [a] 17 - 17 Net quarter-to-date other comprehensive income/(loss), net of taxes of ($ 5 ) million 18 ( 61 ) ( 43 ) Balance at June 30, 2020 $ ( 1,110 ) $ ( 262 ) $ ( 1,372 ) Balance at April 1, 2019 $ ( 1,182 ) $ ( 196 ) $ ( 1,378 ) Other comprehensive income/(loss) before reclassifications ( 22 ) ( 2 ) ( 24 ) Amounts reclassified from accumulated other comprehensive income/(loss) [a] 12 - 12 OPEB Plan amendment (Note 5) 92 - 92 Net quarter-to-date other comprehensive income/(loss), net of taxes of ($ 27 ) million 82 ( 2 ) 80 Balance at June 30, 2019 $ ( 1,100 ) $ ( 198 ) $ ( 1,298 ) [a] The accumulated other comprehensive income/(loss) reclassification components are 1) prior service cost/(credit) and 2) net actuarial loss which are both included in the computation of net periodic pension cost. See Note 5 Retirement Plans for additional details. Millions Defined benefit plans Foreign currency translation Total Balance at January 1, 2020 $ ( 1,150 ) $ ( 206 ) $ ( 1,356 ) Other comprehensive income/(loss) before reclassifications 3 ( 56 ) ( 53 ) Amounts reclassified from accumulated other comprehensive income/(loss) [a] 37 - 37 Net year-to-date other comprehensive income/(loss), net of taxes of ($ 12 ) million 40 ( 56 ) ( 16 ) Balance at June 30, 2020 $ ( 1,110 ) $ ( 262 ) $ ( 1,372 ) Balance at January 1, 2019 $ ( 1,192 ) $ ( 223 ) $ ( 1,415 ) Other comprehensive income/(loss) before reclassifications ( 25 ) 25 - Amounts reclassified from accumulated other comprehensive income/(loss) [a] 25 - 25 OPEB Plan amendment (Note 5) 92 - 92 Net year-to-date other comprehensive income/(loss), net of taxes of ($ 31 ) million 92 25 117 Balance at June 30, 2019 $ ( 1,100 ) $ ( 198 ) $ ( 1,298 ) [a] The accumulated other comprehensive income/(loss) reclassification components are 1) prior service cost/(credit) and 2) net actuarial loss which are both included in the computation of net periodic pension cost. See Note 5 Retirement Plans for additional details. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2020 | |
Accounts Receivable [Abstract] | |
Accounts Receivable | 10. Accounts Receivable Accounts receivable includes freight and other receivables reduced by an allowance for doubtful accounts. The allowance is based upon historical losses, creditworthiness of customers, and current economic conditions. At June 30, 2020, and December 31, 2019, our accounts receivable were reduced by $ 20 million and $ 4 million, respectively. Receivables not expected to be collected in one year and the associated allowances are classified as other assets in our Condensed Consolidated Statements of Financial Position. At June 30, 2020, and December 31, 2019, receivables classified as other assets were reduced by allowances of $ 44 million and $ 35 million, respectively. Receivables Securitization Facility – The Railroad maintains an $ 800 million, 3 -year receivables securitization facility (the Receivables Facility) maturing in July 2022 . Under the Receivables Facility, the Railroad sells most of its eligible third-party receivables to Union Pacific Receivables, Inc. (UPRI), a consolidated, wholly-owned, bankruptcy-remote subsidiary that may subsequently transfer, without recourse, an undivided interest in accounts receivable to investors. The investors have no recourse to the Railroad’s other assets except for customary warranty and indemnity claims. Creditors of the Railroad do not have recourse to the assets of UPRI. The amount recorded under the Receivables Facility was $ 400 million at both June 30, 2020, and December 31, 2019. The Receivables Facility was supported by $ 1.1 billion and $ 1.3 billion of accounts receivable as collateral at June 30, 2020, and December 31, 2019, respectively, which, as a retained interest, is included in accounts receivable, net in our Condensed Consolidated Statements of Financial Position. The outstanding amount the Railroad is allowed to maintain under the Receivables Facility, with a maximum of $800 million, may fluctuate based on the availability of eligible receivables and is directly affected by business volumes and credit risks, including receivables payment quality measures such as default and dilution ratios. If default or dilution ratios increase one percent, the allowable outstanding amount under the Receivables Facility would not materially change. The costs of the Receivables Facility include interest, which will vary based on prevailing benchmark and commercial paper rates, program fees paid to participating banks, commercial paper issuance costs, and fees of participating banks for unused commitment availability. The costs of the Receivables Facility are included in interest expense and were $ 1 million and $ 3 million for the three months ended June 30, 2020, and 2019, respectively, and $ 4 million and $ 7 million for the six months ended June 30, 2020 and 2019, respectively. |
Properties
Properties | 6 Months Ended |
Jun. 30, 2020 | |
Properties [Abstract] | |
Properties | 11. Properties The following tables list the major categories of property and equipment, as well as the weighted-average estimated useful life for each category (in years): Millions, Except Estimated Useful Life Accumulated Net Book Estimated As of June 30, 2020 Cost Depreciation Value Useful Life Land $ 5,274 $ N/A $ 5,274 N/A Road: Rail and other track material 17,391 6,496 10,895 42 Ties 10,886 3,264 7,622 34 Ballast 5,855 1,704 4,151 34 Other roadway [a] 20,629 4,195 16,434 48 Total road 54,761 15,659 39,102 N/A Equipment: Locomotives 9,400 3,456 5,944 17 Freight cars 2,095 784 1,311 24 Work equipment and other 1,098 338 760 18 Total equipment 12,593 4,578 8,015 N/A Technology and other 1,196 510 686 12 Construction in progress 1,193 - 1,193 N/A Total $ 75,017 $ 20,747 $ 54,270 N/A Millions, Except Estimated Useful Life Accumulated Net Book Estimated As of December 31, 2019 Cost Depreciation Value Useful Life Land $ 5,276 $ N/A $ 5,276 N/A Road: Rail and other track material 17,178 6,381 10,797 42 Ties 10,693 3,186 7,507 34 Ballast 5,752 1,669 4,083 34 Other roadway [a] 20,331 4,056 16,275 48 Total road 53,954 15,292 38,662 N/A Equipment: Locomotives 9,467 3,434 6,033 18 Freight cars 2,083 779 1,304 25 Work equipment and other 1,081 322 759 18 Total equipment 12,631 4,535 8,096 N/A Technology and other 1,136 503 633 12 Construction in progress 1,249 - 1,249 N/A Total $ 74,246 $ 20,330 $ 53,916 N/A [a] Other roadway includes grading, bridges and tunnels, signals, buildings, and other road assets. |
Accounts Payable and Other Curr
Accounts Payable and Other Current Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Accounts Payable and Other Current Liabilties [Abstract] | |
Accounts Payable and Other Current Liabilities | 12. Accounts Payable and Other Current Liabilities Jun. 30, Dec. 31, Millions 2020 2019 Income and other taxes payable $ 970 $ 496 Accounts payable 595 749 Accrued wages and vacation 345 370 Interest payable 342 289 Current operating lease liabilities (Note 16) 319 362 Accrued casualty costs 182 190 Equipment rents payable 83 100 Other 453 538 Total accounts payable and other current liabilities $ 3,289 $ 3,094 |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Financial Instruments[Abstract] | |
Financial Instruments | 13. Financial Instruments Short-Term Investments – All of the Company’s short-term investments consist of time deposits and government agency securities. These investments are considered Level 2 investments and are valued at amortized cost, which approximates fair value. As of June 30, 2020, the Company had $ 75 million of short-term investments, of which $ 15 million are in a trust for the purpose of providing collateral for payment of certain other long-term liabilities, and as such are classified as other assets. All short-term investments have a maturity of less than one year and are classified as held-to-maturity. Fair Value of Financial Instruments – The fair value of our short- and long-term debt was estimated using a market value price model, which utilizes applicable U.S. Treasury rates along with current market quotes on comparable debt securities. All of the inputs used to determine the fair market value of the Corporation’s long-term debt are Level 2 inputs and obtained from an independent source. At June 30, 2020, the fair value of total debt was $ 33.6 billion, approximately $ 5.2 billion more than the carrying value. At December 31, 2019, the fair value of total debt was $ 27.2 billion, approximately $ 2.0 billion more than the carrying value. The fair value of the Corporation’s debt is a measure of its current value under present market conditions. The fair value of our cash equivalents approximates their carrying value due to the short-term maturities of these instruments. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt [Abstract] | |
Debt | 14. Debt Credit Facilities – At June 30, 2020, we had $ 2.0 billion of credit available under our revolving credit facility (the Facility), which is designated for general corporate purposes and can be used to support the issuance of commercial paper. Credit facility withdrawals totaled $ 0 during the six months ended June 30, 2020. Commitment fees and interest rates payable under the Facility are similar to fees and rates available to comparably rated, investment-grade borrowers. The Facility allows for borrowings at floating rates based on London Interbank Offered Rates, plus a spread, depending upon credit ratings for our senior unsecured debt. The 5 year facility, set to expire on June 8, 2023 , requires UPC to maintain a debt-to-EBITDA (earnings before interest, taxes, depreciation, and amortization) coverage ratio. The definition of debt used for purposes of calculating the debt-to-EBITDA coverage ratio includes, among other things, certain credit arrangements, finance leases, guarantees, unfunded and vested pension benefits under Title IV of ERISA, and unamortized debt discount and deferred debt issuance costs. At June 30, 2020, the Company was in compliance with the debt-to-EBITDA coverage ratio, which allows us to carry up to $ 36.9 billion of debt (as defined in the Facility), and we had $ 29.7 billion of debt (as defined in the Facility) outstanding at that date. The Facility does not include any other financial restrictions, credit rating triggers (other than rating-dependent pricing), or any other provision that could require us to post collateral. The Facility also includes a $ 150 million cross-default provision and a change-of-control provision. During the six months ended June 30, 2020, we issued $ 1.5 billion and repaid $ 1.5 billion of commercial paper with maturities ranging from 14 to 39 days, and at June 30, 2020, we had $ 200 million of commercial paper outstanding. Our revolving credit facility can be used to support our outstanding commercial paper balances, and, unless we change the terms of our commercial paper program, our aggregate issuance of commercial paper will not exceed the amount of borrowings available under the Facility. In May 2020, we entered into three bilateral revolving credit lines which mature by May 18, 2021 totaling $ 600 million of available credit. During the three months ended June 30, 2020, we drew $ 300 million and repaid $ 0 , and at June 30, 2020, we had $ 300 million outstanding. Shelf Registration Statement and Significant New Borrowings – In 2019, our Board of Directors reauthorized the issuance of up to $ 6 billion of debt securities. Under our shelf registration, we may issue, from time to time any combination of debt securities, preferred stock, common stock, or warrants for debt securities or preferred stock in one or more offerings. During the six months ended June 30, 2020, we issued the following unsecured, fixed-rate debt securities under our current shelf registration : Date Description of Securities January 31, 2020 $ 500 million of 2.150 % Notes due February 5, 2027 $ 750 million of 2.400 % Notes due February 5, 2030 $ 1.0 billion of 3.250 % Notes due February 5, 2050 $ 750 million of 3.750 % Notes due February 5, 2070 April 7, 2020 $ 750 million of 3.250 % Notes due February 5, 2050 We used the net proceeds from these offerings for general corporate purposes, including the repurchase of common stock pursuant to our share repurchase programs. These debt securities include change-of-control provisions. At June 30, 2020 , we had remaining authority from the Board of Directors to issue up to $ 2.25 billion of debt securities under our shelf registration. Receivables Securitization Facility – As of both June 30, 2020, and December 31, 2019, we recorded $ 400 million of borrowings under our Receivables Facility as secured debt. (See further discussion of our receivables securitization facility in Note 10). |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2020 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | 15. Variable Interest Entities We have entered into various lease transactions in which the structure of the leases contain variable interest entities (VIEs). These VIEs were created solely for the purpose of doing lease transactions (principally involving railroad equipment and facilities) and have no other activities, assets or liabilities outside of the lease transactions. Within these lease arrangements, we have the right to purchase some or all of the assets at fixed prices. Depending on market conditions, fixed-price purchase options available in the leases could potentially provide benefits to us; however, these benefits are not expected to be significant. We maintain and operate the assets based on contractual obligations within the lease arrangements, which set specific guidelines consistent within the railroad industry. As such, we have no control over activities that could materially impact the fair value of the leased assets. We do not hold the power to direct the activities of the VIEs and, therefore, do not control the ongoing activities that have a significant impact on the economic performance of the VIEs. Additionally, we do not have the obligation to absorb losses of the VIEs or the right to receive benefits of the VIEs that could potentially be significant to the VIEs. We are not considered to be the primary beneficiary and do not consolidate these VIEs because our actions and decisions do not have the most significant effect on the VIE’s performance and our fixed-price purchase options are not considered to be potentially significant to the VIEs. The future minimum lease payments associated with the VIE leases totaled $ 1.3 billion as of June 30, 2020 and are recorded as operating lease liabilities at present value in our Consolidated Statements of Financial Position. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases [Text Block] | 16. Leases We lease certain locomotives, freight cars, and other property for use in our rail operations. We determine if an arrangement is or contains a lease at inception. We have lease agreements with lease and non-lease components and we have elected to not separate lease and non-lease components for all classes of underlying assets. L eases with an initial term of 12 months or less are not recorded on our Consolidated Statements of Financial Position; we recognize lease expense for these leases on a straight-line basis over the lease term. Leases with initial terms in excess of 12 months are recorded as operating or financing leases in our Consolidated Statement of Financial Position. Operating leases are included in operating lease assets, accounts payable and other current liabilities, and operating lease liabilities on our Consolidated Statements of Financial Position. Finance leases are included in net properties, debt due within one year, and debt due after one year on our Consolidated Statements of Financial Position. Operating lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use a collateralized incremental borrowing rate for all operating leases based on the information available at commencement date, including lease term, in determining the present value of future payments. The operating lease asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Operating lease expense is recognized on a straight-line basis over the lease term and reported in equipment and other rents and financing lease expense is recorded as depreciation and interest expense in our Consolidated Statements of Income. The following are additional details related to our lease portfolio: Jun. 30, Dec. 31, Millions Classification 2020 2019 Assets Operating leases Operating lease assets $ 1,700 $ 1,812 Finance leases Net properties [a] 427 468 Total leased assets $ 2,127 $ 2,280 Liabilities Current Operating leases Accounts payable and other current liabilities $ 319 $ 362 Finance leases Debt due within one year 105 114 Noncurrent Operating leases Operating lease liabilities 1,320 1,471 Finance leases Debt due after one year 427 491 Total lease liabilities $ 2,171 $ 2,438 [a] Finance lease assets are recorded net of accumulated amortization of $ 774 million and $ 797 million as of June 30, 2020 and December 31, 2019. The lease cost components are classified as follows: Three Months Ended Six Months Ended June 30, June 30, Millions Classification 2020 2019 2020 2019 Operating lease cost [a] Equipment and other rents $ 68 $ 85 $ 137 $ 178 Finance lease cost Amortization of leased assets Depreciation 17 18 34 36 Interest on lease liabilities Interest expense 7 8 14 17 Net lease cost $ 92 $ 111 $ 185 $ 231 [a] Includes short-term lease costs of $ 0.6 million and $ 0.2 million for the three months ended June 30, 2020, and 2019, respectively, and $ 0.8 million and $ 0.4 million for the six months ended June 30, 2020, and 2019, respectively, and variable lease costs of $ 1.4 million and $ 2.1 million for the three months ended June 30, 2020, and 2019, respectively, and $ 3.2 million and $ 4.0 million for the six months ended June 30, 2020, and 2019, respectively. The following table presents aggregate lease maturities as of June 30, 2020: Millions Operating Leases Finance Leases Total 2020 $ 103 $ 62 $ 165 2021 302 142 444 2022 267 127 394 2023 225 88 313 2024 216 75 291 After 2024 781 124 905 Total lease payments $ 1,894 $ 618 $ 2,512 Less: Interest 255 86 341 Present value of lease liabilities $ 1,639 $ 532 $ 2,171 The following table presents the weighted average remaining lease term and discount rate: Jun. 30, 2020 Weighted-average remaining lease term (years) Operating leases 8.2 Finance leases 5.7 Weighted-average discount rate (%) Operating leases 3.7 Finance leases 5.1 The following table presents other information related to our operating and finance leases: Millions, for the Six Months Ended June 30, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 252 255 Operating cash flows from finance leases 15 20 Financing cash flows from finance leases 66 79 Leased assets obtained in exchange for finance lease liabilities - - Leased assets obtained in exchange for operating lease liabilities 50 27 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies [Abstract] | |
Commitments and Contingencies | 17. Commitments and Contingencies Asserted and Unasserted Claims – Various claims and lawsuits are pending against us and certain of our subsidiaries. We cannot fully determine the effect of all asserted and unasserted claims on our consolidated results of operations, financial condition, or liquidity. To the extent possible, we have recorded a liability where asserted and unasserted claims are considered probable and where such claims can be reasonably estimated. We do not expect that any known lawsuits, claims, environmental costs, commitments, contingent liabilities, or guarantees will have a material adverse effect on our consolidated results of operations, financial condition, or liquidity after taking into account liabilities and insurance recoveries previously recorded for these matters. Personal Injury – The cost of personal injuries to employees and others related to our activities is charged to expense based on estimates of the ultimate cost and number of incidents each year. We use an actuarial analysis to measure the expense and liability, including unasserted claims. The Federal Employers’ Liability Act (FELA) governs compensation for work-related accidents. Under FELA, damages are assessed based on a finding of fault through litigation or out-of-court settlements. We offer a comprehensive variety of services and rehabilitation programs for employees who are injured at work. Our personal injury liability is not discounted to present value due to the uncertainty surrounding the timing of future payments. Approximately 95 % of the recorded liability is related to asserted claims and approximately 5 % is related to unasserted claims at June 30, 2020. Because of the uncertainty surrounding the ultimate outcome of personal injury claims, it is reasonably possible that future costs to settle these claims may range from approximately $ 259 million to $ 283 million. We record an accrual at the low end of the range as no amount of loss within the range is more probable than any other. Estimates can vary over time due to evolving trends in litigation. Our personal injury liability activity was as follows : Millions, for the Six Months Ended June 30, 2020 2019 Beginning balance $ 265 $ 271 Current year accruals 34 36 Changes in estimates for prior years ( 4 ) ( 11 ) Payments ( 36 ) ( 31 ) Ending balance at June 30 $ 259 $ 265 Current portion, ending balance at June 30 $ 65 $ 63 We reassess our estimated insurance recoveries annually and have recognized an asset for estimated insurance recoveries at both June 30, 2020, and December 31, 2019. Any changes to recorded insurance recoveries are included in the above table in the Changes in estimates for prior years category. Environmental Costs – We are subject to federal, state, and local environmental laws and regulations. We have identified 379 sites at which we are or may be liable for remediation costs associated with alleged contamination or for violations of environmental requirements. This includes 31 sites that are the subject of actions taken by the U.S. government, 20 of which are currently on the Superfund National Priorities List. Certain federal legislation imposes joint and several liability for the remediation of identified sites; consequently, our ultimate environmental liability may include costs relating to activities of other parties, in addition to costs relating to our own activities at each site. When we identify an environmental issue with respect to property owned, leased, or otherwise used in our business, we perform, with assistance of our consultants, environmental assessments on the property. We expense the cost of the assessments as incurred. We accrue the cost of remediation where our obligation is probable and such costs can be reasonably estimated. Our environmental liability is not discounted to present value due to the uncertainty surrounding the timing of future payments. Our environmental liability activity was as follows: Millions, for the Six Months Ended June 30, 2020 2019 Beginning balance $ 227 $ 223 Accruals 28 32 Payments ( 27 ) ( 35 ) Ending balance at June 30 $ 228 $ 220 Current portion, ending balance at June 30 $ 63 $ 63 The environmental liability includes future costs for remediation and restoration of sites, as well as ongoing monitoring costs, but excludes any anticipated recoveries from third parties. Cost estimates are based on information available for each site, financial viability of other potentially responsible parties, and existing technology, laws, and regulations. The ultimate liability for remediation is difficult to determine because of the number of potentially responsible parties, site-specific cost sharing arrangements with other potentially responsible parties, the degree of contamination by various wastes, the scarcity and quality of volumetric data related to many of the sites, and the speculative nature of remediation costs. Estimates of liability may vary over time due to changes in federal, state, and local laws governing environmental remediation. Current obligations are not expected to have a material adverse effect on our consolidated results of operations, financial condition, or liquidity. Insurance – The Company has a consolidated, wholly-owned captive insurance subsidiary (the captive), that provides insurance coverage for certain risks including FELA claims and property coverage which are subject to reinsurance. The captive entered into annual reinsurance treaty agreements that insure workers compensation, general liability, auto liability and FELA risk. The captive cedes a portion of its FELA exposure through the treaty and assumes a proportionate share of the entire risk. The captive receives direct premiums, which are netted against the Company’s premium costs in other expenses in the Condensed Consolidated Statements of Income. The treaty agreements provide for certain protections against the risk of treaty participants’ non-performance, and we do not believe our exposure to treaty participants’ non-performance is material at this time. We record both liabilities and reinsurance receivables using an actuarial analysis based on historical experience in our Condensed Consolidated Statements of Financial Position. Effective January 2019, the captive insurance subsidiary no longer participates in the reinsurance treaty agreement. The Company established a trust in the fourth quarter of 2018 for the purpose of providing collateral as required under the reinsurance treaty agreement for prior years’ participation. Guarantees – At both June 30, 2020 and December 31, 2019, we were contingently liable for $ 15 million in guarantees. The fair value of these obligations as of both June 30, 2020, and December 31, 2019 was $ 0 . We entered into these contingent guarantees in the normal course of business, and they include guaranteed obligations related to our affiliated operations. The final guarantee expires in 2022 . We are not aware of any existing event of default that would require us to satisfy these guarantees. We do not expect that these guarantees will have a material adverse effect on our consolidated financial condition, results of operations, or liquidity. Indemnities – We are contingently obligated under a variety of indemnification arrangements, although in some cases the extent of our potential liability is limited, depending on the nature of the transactions and the agreements. Due to uncertainty as to whether claims will be made or how they will be resolved, we cannot reasonably determine the probability of an adverse claim or reasonably estimate any adverse liability or the total maximum exposure under these indemnification arrangements. We do not have any reason to believe that we will be required to make any material payments under these indemnity provisions. |
Share Repurchase Program
Share Repurchase Program | 6 Months Ended |
Jun. 30, 2020 | |
Share Repurchase Program [Abstract] | |
Share Repurchase Program | 18. Share Repurchase Programs Effective April 1, 2019, our Board of Directors authorized the repurchase of up to 150 million shares of our common stock by March 31, 2022 . These repurchases may be made on the open market or through other transactions. Our management has sole discretion with respect to determining the timing and amount of these transactions. As of June 30, 2020, we repurchased a total of $ 39.7 billion of our common stock since commencement of our repurchase programs in 2007. The table below represents shares repurchased under repurchase programs in the first and second quarters of 2020 and 2019: Number of Shares Purchased Average Price Paid 2020 2019 2020 2019 First quarter [a] 14,305,793 18,149,450 $ 178.66 $ 165.79 Second quarter - 3,732,974 - 171.24 Total 14,305,793 21,882,424 $ 178.66 $ 166.72 Remaining number of shares that may be repurchased under current authority 118,849,288 [a] Includes 8,786,380 and 11,795,930 shares repurchased in February 2020 and 2019, respectively, under accelerated share repurchase programs. Management's assessments of market conditions and other pertinent factors guide the timing and volume of all repurchases. We expect to fund any share repurchases under this program through cash generated from operations, the sale or lease of various operating and non-operating properties, debt issuances, and cash on hand. Open market repurchases are recorded in treasury stock at cost, which includes any applicable commissions and fees. Accelerated Share Repurchase Programs – The Company has established accelerated share repurchase programs (ASRs) with financial institutions to repurchase shares of our common stock. These ASRs have been structured so that at the time of commencement, we pay a specified amount to the financial institutions and receive an initial delivery of shares. Additional shares may be received at the time of settlement. The final number of shares to be received is based on the volume weighted average price of the Company’s common stock during the ASR term, less a discount and subject to potential adjustments pursuant to the terms of such ASR. On February 19, 2020, the Company received 8,786,380 shares of its common stock repurchased under ASRs for an aggregate of $ 2.0 billion. When the shares were received, the exchange was accounted for as an equity transaction with $ 1.6 billion of the aggregate amount allocated to treasury stock and the remaining $ 0.4 billion allocated to paid-in-surplus. This delivery of shares represents the initial and likely minimum number of shares that we may receive under the ASRs initiated in 2020. The final settlement is expected to be completed prior to the end of the third quarter of 2020. On February 26, 2019, the Company received 11,795,930 shares of its common stock repurchased under ASRs for an aggregate of $ 2.5 billion. Upon settlement of these ASRs in the third quarter of 2019, we received 3,172,900 additional shares. ASRs are accounted for as equity transactions, and at the time of receipt, shares are included in treasury stock at fair market value as of the corresponding initiation or settlement date. The Company reflects shares received as a repurchase of common stock in the weighted average common shares outstanding calculation for basic and diluted earnings per share. |
Related Parties
Related Parties | 6 Months Ended |
Jun. 30, 2020 | |
Related Parties [Abstract] | |
Related Parties | 19. Related Parties UPRR and other North American railroad companies jointly own TTX Company (TTX). UPRR has a 36.79 % economic and voting interest in TTX while the other North American railroads own the remaining interest. In accordance with ASC 323 Investments - Equity Method and Joint Venture , UPRR applies the equity method of accounting to our investment in TTX. TTX is a railcar pooling company that owns railcars and intermodal wells to serve North America’s railroads. TTX assists railroads in meeting the needs of their customers by providing railcars in an efficient, pooled environment. All railroads have the ability to utilize TTX railcars through car hire by renting railcars at stated rates. UPRR had $ 1.4 billion recognized as investments related to TTX in our Condensed Consolidated Statements of Financial Position as of both June 30, 2020, and December 31, 2019. TTX car hire expenses of $ 88 million and $ 108 million for the three months ended June 30, 2020, and 2019, respectively, and $ 184 and $ 215 million for the six months ended June 30, 2020, and 2019, respectively, are included in equipment and other rents in our Condensed Consolidated Statements of Income. In addition, UPRR had accounts payable to TTX of $ 61 million and $ 62 million as of June 30, 2020, and December 31, 2019, respectively. |
Operations and Segmentation (Ta
Operations and Segmentation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Operations and Segmentation [Abstract] | |
Freight Revenue By Commodity Group | The following table represents a disaggregation of our freight and other revenues: Three Months Ended Six Months Ended June 30, June 30, Millions 2020 2019 2020 2019 Bulk $ 1,386 $ 1,678 $ 2,920 $ 3,298 Industrial 1,500 1,937 3,394 3,776 Premium 1,086 1,621 2,538 3,172 Total freight revenues $ 3,972 $ 5,236 $ 8,852 $ 10,246 Other subsidiary revenues 150 219 364 442 Accessorial revenues 103 123 220 256 Other 19 18 37 36 Total operating revenues $ 4,244 $ 5,596 $ 9,473 $ 10,980 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Stock-based compensation [Abstract] | |
Stock-Based Compensation | Information regarding stock-based compensation appears in the table below: Three Months Ended Six Months Ended June 30, June 30, Millions 2020 2019 2020 2019 Stock-based compensation, before tax: Stock options $ 4 $ 4 $ 8 $ 9 Retention awards 14 20 32 42 Total stock-based compensation, before tax $ 18 $ 24 $ 40 $ 51 Excess tax benefits from equity compensation plans $ 2 $ 6 $ 35 $ 45 |
Stock Options Weight Average Assumptions | The table below shows the annual weighted-average assumptions used for valuation purposes: Weighted-Average Assumptions 2020 2019 Risk-free interest rate 1.5 % 2.5 % Dividend yield 2.1 % 2.2 % Expected life (years) 4.9 5.2 Volatility 23.4 % 22.7 % Weighted-average grant-date fair value of options granted $ 32.20 $ 30.37 |
Stock Options Activity | A summary of stock option activity during the six months ended June 30, 2020, is presented below: Options (thous.) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (millions) Outstanding at January 1, 2020 3,502 $ 113.38 6.1 yrs. $ 236 Granted 558 176.63 N/A N/A Exercised ( 849 ) 102.61 N/A N/A Forfeited or expired ( 12 ) 150.52 N/A N/A Outstanding at June 30, 2020 3,199 $ 127.13 6.6 yrs. $ 142 Vested or expected to vest at June 30, 2020 3,165 $ 126.74 6.6 yrs. $ 142 Options exercisable at June 30, 2020 2,059 $ 108.52 5.5 yrs. $ 125 |
Stock Option Exercises | Additional information regarding stock option exercises appears in the following table: Three Months Ended Six Months Ended June 30, June 30, Millions 2020 2019 2020 2019 Intrinsic value of stock options exercised $ 17 $ 26 $ 65 $ 164 Cash received from option exercises 18 26 51 98 Treasury shares repurchased for employee taxes ( 4 ) ( 7 ) ( 12 ) ( 29 ) Tax benefit realized from option exercises 3 6 14 40 Aggregate grant-date fair value of stock options vested - - 14 15 |
Retention Awards Activity | Changes in our retention awards during the six months ended June 30, 2020, were as follows: Shares (thous.) Weighted-Average Grant-Date Fair Value Nonvested at January 1, 2020 1,898 $ 112.12 Granted 304 185.97 Vested ( 611 ) 76.13 Forfeited ( 36 ) 136.99 Nonvested at June 30, 2020 1,555 $ 140.12 |
Performance Retention Awards Present Value Calculation Assumptions | The assumptions used to calculate the present value of estimated future dividends related to the February 2020 grant were as follows: 2020 Dividend per share per quarter $ 0.97 Risk-free interest rate at date of grant 1.4 % |
Performance Based Units Activity | Changes in our performance retention awards during the six months ended June 30, 2020, were as follows: Shares (thous.) Weighted-Average Grant-Date Fair Value Nonvested at January 1, 2020 929 $ 123.32 Granted 287 166.63 Vested ( 339 ) 102.91 Unearned ( 8 ) 150.42 Forfeited ( 35 ) 138.98 Nonvested at June 30, 2020 834 $ 145.60 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Plans [Abstract] | |
Net Periodic Pension And OPEB Cost/(Benefit) | The components of our net periodic pension cost were as follows: Three Months Ended Six Months Ended June 30, June 30, Millions 2020 2019 2020 2019 Service cost $ 26 $ 22 $ 53 $ 44 Interest cost 35 40 69 80 Expected return on plan assets ( 70 ) ( 68 ) ( 140 ) ( 136 ) Amortization of actuarial loss 24 16 52 32 Net periodic pension cost $ 15 $ 10 $ 34 $ 20 The components of our net periodic OPEB costs were as follows: Three Months Ended Six Months Ended June 30, June 30, Millions 2020 2019 2020 2019 Service cost $ 1 $ 1 $ 1 $ 1 Interest cost 2 2 3 5 Amortization of: Prior service cost ( 4 ) - ( 7 ) - Actuarial loss 2 2 4 3 Net periodic OPEB cost $ 1 $ 5 $ 1 $ 9 |
Other Income (Tables)
Other Income (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Other Income [Abstract] | |
Other Income | Other income included the following: Three Months Ended Six Months Ended June 30, June 30, Millions 2020 2019 2020 2019 Net gain on non-operating asset dispositions [a] $ 83 $ 6 $ 94 $ 10 Rental income 30 33 61 62 Net periodic pension and OPEB costs 11 8 19 16 Interest income 3 6 9 15 Interest income on employment tax refund - 3 - 30 Non-operating environmental costs and other 4 1 1 1 Total $ 131 $ 57 $ 184 $ 134 [a] 2020 includes a $ 69 million gain from a land and permanent easement sale to the Illinois State Toll Highway Authority. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | The following table provides a reconciliation between basic and diluted earnings per share: Three Months Ended Six Months Ended June 30, June 30, Millions, Except Per Share Amounts 2020 2019 2020 2019 Net income $ 1,132 $ 1,570 $ 2,606 $ 2,961 Weighted-average number of shares outstanding: Basic 677.7 705.5 681.0 711.2 Dilutive effect of stock options 0.7 1.3 0.8 1.3 Dilutive effect of retention shares and units 0.8 1.2 0.9 1.3 Diluted 679.2 708.0 682.7 713.8 Earnings per share – basic $ 1.67 $ 2.23 $ 3.83 $ 4.16 Earnings per share – diluted $ 1.67 $ 2.22 $ 3.82 $ 4.15 Stock options excluded as their inclusion would be anti-dilutive 1.0 0.6 0.8 0.5 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income/(Loss) (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accumulated Other Comprehensive Income/(Loss) [Abstract] | |
After-Tax Components Of Accumulated Other Comprehensive Loss | Reclassifications out of accumulated other comprehensive income/(loss) for the three and six months ended June 30, 2020, and 2019, were as follows (net of tax): Millions Defined benefit plans Foreign currency translation Total Balance at April 1, 2020 $ ( 1,128 ) $ ( 201 ) $ ( 1,329 ) Other comprehensive income/(loss) before reclassifications 1 ( 61 ) ( 60 ) Amounts reclassified from accumulated other comprehensive income/(loss) [a] 17 - 17 Net quarter-to-date other comprehensive income/(loss), net of taxes of ($ 5 ) million 18 ( 61 ) ( 43 ) Balance at June 30, 2020 $ ( 1,110 ) $ ( 262 ) $ ( 1,372 ) Balance at April 1, 2019 $ ( 1,182 ) $ ( 196 ) $ ( 1,378 ) Other comprehensive income/(loss) before reclassifications ( 22 ) ( 2 ) ( 24 ) Amounts reclassified from accumulated other comprehensive income/(loss) [a] 12 - 12 OPEB Plan amendment (Note 5) 92 - 92 Net quarter-to-date other comprehensive income/(loss), net of taxes of ($ 27 ) million 82 ( 2 ) 80 Balance at June 30, 2019 $ ( 1,100 ) $ ( 198 ) $ ( 1,298 ) [a] The accumulated other comprehensive income/(loss) reclassification components are 1) prior service cost/(credit) and 2) net actuarial loss which are both included in the computation of net periodic pension cost. See Note 5 Retirement Plans for additional details. Millions Defined benefit plans Foreign currency translation Total Balance at January 1, 2020 $ ( 1,150 ) $ ( 206 ) $ ( 1,356 ) Other comprehensive income/(loss) before reclassifications 3 ( 56 ) ( 53 ) Amounts reclassified from accumulated other comprehensive income/(loss) [a] 37 - 37 Net year-to-date other comprehensive income/(loss), net of taxes of ($ 12 ) million 40 ( 56 ) ( 16 ) Balance at June 30, 2020 $ ( 1,110 ) $ ( 262 ) $ ( 1,372 ) Balance at January 1, 2019 $ ( 1,192 ) $ ( 223 ) $ ( 1,415 ) Other comprehensive income/(loss) before reclassifications ( 25 ) 25 - Amounts reclassified from accumulated other comprehensive income/(loss) [a] 25 - 25 OPEB Plan amendment (Note 5) 92 - 92 Net year-to-date other comprehensive income/(loss), net of taxes of ($ 31 ) million 92 25 117 Balance at June 30, 2019 $ ( 1,100 ) $ ( 198 ) $ ( 1,298 ) [a] The accumulated other comprehensive income/(loss) reclassification components are 1) prior service cost/(credit) and 2) net actuarial loss which are both included in the computation of net periodic pension cost. See Note 5 Retirement Plans for additional details. |
Properties (Tables)
Properties (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Properties [Abstract] | |
Schedule Of Properties | The following tables list the major categories of property and equipment, as well as the weighted-average estimated useful life for each category (in years): Millions, Except Estimated Useful Life Accumulated Net Book Estimated As of June 30, 2020 Cost Depreciation Value Useful Life Land $ 5,274 $ N/A $ 5,274 N/A Road: Rail and other track material 17,391 6,496 10,895 42 Ties 10,886 3,264 7,622 34 Ballast 5,855 1,704 4,151 34 Other roadway [a] 20,629 4,195 16,434 48 Total road 54,761 15,659 39,102 N/A Equipment: Locomotives 9,400 3,456 5,944 17 Freight cars 2,095 784 1,311 24 Work equipment and other 1,098 338 760 18 Total equipment 12,593 4,578 8,015 N/A Technology and other 1,196 510 686 12 Construction in progress 1,193 - 1,193 N/A Total $ 75,017 $ 20,747 $ 54,270 N/A Millions, Except Estimated Useful Life Accumulated Net Book Estimated As of December 31, 2019 Cost Depreciation Value Useful Life Land $ 5,276 $ N/A $ 5,276 N/A Road: Rail and other track material 17,178 6,381 10,797 42 Ties 10,693 3,186 7,507 34 Ballast 5,752 1,669 4,083 34 Other roadway [a] 20,331 4,056 16,275 48 Total road 53,954 15,292 38,662 N/A Equipment: Locomotives 9,467 3,434 6,033 18 Freight cars 2,083 779 1,304 25 Work equipment and other 1,081 322 759 18 Total equipment 12,631 4,535 8,096 N/A Technology and other 1,136 503 633 12 Construction in progress 1,249 - 1,249 N/A Total $ 74,246 $ 20,330 $ 53,916 N/A [a] Other roadway includes grading, bridges and tunnels, signals, buildings, and other road assets. |
Accounts Payable And Other Cu_2
Accounts Payable And Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounts Payable and Other Current Liabilties [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Jun. 30, Dec. 31, Millions 2020 2019 Income and other taxes payable $ 970 $ 496 Accounts payable 595 749 Accrued wages and vacation 345 370 Interest payable 342 289 Current operating lease liabilities (Note 16) 319 362 Accrued casualty costs 182 190 Equipment rents payable 83 100 Other 453 538 Total accounts payable and other current liabilities $ 3,289 $ 3,094 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt [Abstract] | |
Unsecured Fixed Rate Debt Securities Issued Under Current Shelf Registration | During the six months ended June 30, 2020, we issued the following unsecured, fixed-rate debt securities under our current shelf registration : Date Description of Securities January 31, 2020 $ 500 million of 2.150 % Notes due February 5, 2027 $ 750 million of 2.400 % Notes due February 5, 2030 $ 1.0 billion of 3.250 % Notes due February 5, 2050 $ 750 million of 3.750 % Notes due February 5, 2070 April 7, 2020 $ 750 million of 3.250 % Notes due February 5, 2050 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of Leases | The following are additional details related to our lease portfolio: Jun. 30, Dec. 31, Millions Classification 2020 2019 Assets Operating leases Operating lease assets $ 1,700 $ 1,812 Finance leases Net properties [a] 427 468 Total leased assets $ 2,127 $ 2,280 Liabilities Current Operating leases Accounts payable and other current liabilities $ 319 $ 362 Finance leases Debt due within one year 105 114 Noncurrent Operating leases Operating lease liabilities 1,320 1,471 Finance leases Debt due after one year 427 491 Total lease liabilities $ 2,171 $ 2,438 [a] Finance lease assets are recorded net of accumulated amortization of $ 774 million and $ 797 million as of June 30, 2020 and December 31, 2019. |
Schedule of Lease Cost | The lease cost components are classified as follows: Three Months Ended Six Months Ended June 30, June 30, Millions Classification 2020 2019 2020 2019 Operating lease cost [a] Equipment and other rents $ 68 $ 85 $ 137 $ 178 Finance lease cost Amortization of leased assets Depreciation 17 18 34 36 Interest on lease liabilities Interest expense 7 8 14 17 Net lease cost $ 92 $ 111 $ 185 $ 231 [a] Includes short-term lease costs of $ 0.6 million and $ 0.2 million for the three months ended June 30, 2020, and 2019, respectively, and $ 0.8 million and $ 0.4 million for the six months ended June 30, 2020, and 2019, respectively, and variable lease costs of $ 1.4 million and $ 2.1 million for the three months ended June 30, 2020, and 2019, respectively, and $ 3.2 million and $ 4.0 million for the six months ended June 30, 2020, and 2019, respectively. |
Future Minimum Lease Payments For Operating And Finance Leases | The following table presents aggregate lease maturities as of June 30, 2020: Millions Operating Leases Finance Leases Total 2020 $ 103 $ 62 $ 165 2021 302 142 444 2022 267 127 394 2023 225 88 313 2024 216 75 291 After 2024 781 124 905 Total lease payments $ 1,894 $ 618 $ 2,512 Less: Interest 255 86 341 Present value of lease liabilities $ 1,639 $ 532 $ 2,171 |
Weighted Average Remaining Lease Term and Discount Rate | The following table presents the weighted average remaining lease term and discount rate: Jun. 30, 2020 Weighted-average remaining lease term (years) Operating leases 8.2 Finance leases 5.7 Weighted-average discount rate (%) Operating leases 3.7 Finance leases 5.1 |
Schedule of Leases - Other Information | The following table presents other information related to our operating and finance leases: Millions, for the Six Months Ended June 30, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 252 255 Operating cash flows from finance leases 15 20 Financing cash flows from finance leases 66 79 Leased assets obtained in exchange for finance lease liabilities - - Leased assets obtained in exchange for operating lease liabilities 50 27 |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies Activity | Our personal injury liability activity was as follows : Millions, for the Six Months Ended June 30, 2020 2019 Beginning balance $ 265 $ 271 Current year accruals 34 36 Changes in estimates for prior years ( 4 ) ( 11 ) Payments ( 36 ) ( 31 ) Ending balance at June 30 $ 259 $ 265 Current portion, ending balance at June 30 $ 65 $ 63 |
Commitments And Contingencies Activity. | Our environmental liability activity was as follows: Millions, for the Six Months Ended June 30, 2020 2019 Beginning balance $ 227 $ 223 Accruals 28 32 Payments ( 27 ) ( 35 ) Ending balance at June 30 $ 228 $ 220 Current portion, ending balance at June 30 $ 63 $ 63 |
Share Repurchase Program (Table
Share Repurchase Program (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share Repurchase Program [Abstract] | |
Share Repurchase Program | The table below represents shares repurchased under repurchase programs in the first and second quarters of 2020 and 2019: Number of Shares Purchased Average Price Paid 2020 2019 2020 2019 First quarter [a] 14,305,793 18,149,450 $ 178.66 $ 165.79 Second quarter - 3,732,974 - 171.24 Total 14,305,793 21,882,424 $ 178.66 $ 166.72 Remaining number of shares that may be repurchased under current authority 118,849,288 [a] Includes 8,786,380 and 11,795,930 shares repurchased in February 2020 and 2019, respectively, under accelerated share repurchase programs. |
Operations and Segmentation (De
Operations and Segmentation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Commodity Group Information [Line Items] | ||||
Freight revenues | $ 3,972 | $ 5,236 | $ 8,852 | $ 10,246 |
Subsidiary revenue | 150 | 219 | 364 | 442 |
Accessorial revenues | 103 | 123 | 220 | 256 |
Other revenues | 19 | 18 | 37 | 36 |
Total operating revenues | 4,244 | 5,596 | 9,473 | 10,980 |
Cargo and Freight [Member] | ||||
Commodity Group Information [Line Items] | ||||
Freight revenues | 3,972 | 5,236 | 8,852 | 10,246 |
Bulk [Member] | ||||
Commodity Group Information [Line Items] | ||||
Freight revenues | 1,386 | 1,678 | 2,920 | 3,298 |
Industrial [Member] | ||||
Commodity Group Information [Line Items] | ||||
Freight revenues | 1,500 | 1,937 | 3,394 | 3,776 |
Premium [Member] | ||||
Commodity Group Information [Line Items] | ||||
Freight revenues | 1,086 | 1,621 | 2,538 | 3,172 |
Mexico [Member] | ||||
Commodity Group Information [Line Items] | ||||
Freight revenues | $ 389 | $ 603 | $ 972 | $ 1,179 |
Stock-based Compensation (Narra
Stock-based Compensation (Narrative) (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Stock Options [Member] | |
Schedule of Share-based Compensation Arrangements [Line Items] | |
Contractual term | 10 years |
Years until vest | 3 years |
Stock options, subject to performance or market-based vesting conditions | None |
Unrecognized compensation expense | $ 24 |
Expected weighted average period (in years) of nonvested stock options to be recognized | 1 year 4 months 24 days |
Retention Awards [Member] | |
Schedule of Share-based Compensation Arrangements [Line Items] | |
Years until vest | 4 years |
Unrecognized compensation expense | $ 115 |
Expected weighted average period (in years) of nonvested stock options to be recognized | 1 year 10 months 24 days |
Performance Retention Awards [Member] | |
Schedule of Share-based Compensation Arrangements [Line Items] | |
Operating income growth modifier range | The modifier can be up to +/- 25% of the award earned based on the ROIC achieved. |
Requisite service period | 37 months |
Contractual terms of award | We expense the fair value of the units that are probable of being earned based on our forecasted ROIC over the 3-year performance period, and with respect to the third year of the plan, the relative OIG modifier. |
ROIC performance period | 3 years |
Unrecognized compensation expense | $ 24 |
Expected weighted average period (in years) of nonvested stock options to be recognized | 1 year 4 months 24 days |
Stock-based Compensation (Sched
Stock-based Compensation (Schedule Of Compensation) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock-Based Compensation, Before Tax: [Abstract] | ||||
Stock options | $ 4 | $ 4 | $ 8 | $ 9 |
Retention awards | 14 | 20 | 32 | 42 |
Total stock-based compensation, before tax | 18 | 24 | 40 | 51 |
Excess tax benefits from equity compensation plans | $ 2 | $ 6 | $ 35 | $ 45 |
Stock-based Compensation (Sch_2
Stock-based Compensation (Schedule of Stock Options Weight Average Assumptions) (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Stock Options [Member] | ||
Assumptions For Stock Awards [Abstract] | ||
Risk-free interest rate at date of grant | 1.50% | 2.50% |
Dividend yield | 2.10% | 2.20% |
Expected life (years) | 4 years 10 months 24 days | 5 years 2 months 12 days |
Volatility | 23.40% | 22.70% |
Weighted-average grant-date fair value of options granted | $ 32.20 | $ 30.37 |
Performance Retention Awards [Member] | ||
Assumptions For Stock Awards [Abstract] | ||
Dividend per share per quarter | $ 0.97 | |
Risk-free interest rate at date of grant | 1.40% |
Stock-based Compensation (Sch_3
Stock-based Compensation (Schedule of Stock Option Activities) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Stock Options [Member] | ||
Stock Option Activity [Abstract] | ||
Stock options, shares outstanding at January 1, 2020 | 3,502 | |
Stock options, shares granted | 558 | |
Stock options, shares exercised | (849) | |
Stock options, shares forfeited or expired | (12) | |
Stock options, shares outstanding at June 30, 2020 | 3,199 | 3,502 |
Stock options, shares vested or expected to vest at June 30, 2020 | 3,165 | |
Stock options, shares exercisable at June 30, 2020 | 2,059 | |
Stock options weighted-average exercise price, outstanding at January 1, 2020 | $ 113.38 | |
Stock options weighted-average exercise price, granted | 176.63 | |
Stock options weighted-average exercise price, exercised | 102.61 | |
Stock options weighted-average exercise price, forfeited or expired | 150.52 | |
Stock options weighted-average exercise price, outstanding at June 30, 2020 | 127.13 | $ 113.38 |
Stock options weighted-average exercise price, vested or expected to vest at June 30, 2020 | 126.74 | |
Stock options weighted-average exercise price, options exercisable at June 30, 2020 | $ 108.52 | |
Stock options weighted-average remaining contractual term in years, outstanding at January 1, 2020 | 6 years 7 months 6 days | 6 years 1 month 6 days |
Stock options weighted-average remaining contractual term in years, outstanding at June 30, 2020 | 6 years 7 months 6 days | 6 years 1 month 6 days |
Stock options weighted-average remaining contractual term in years, vested or expected to vest at June 30, 2020 | 6 years 7 months 6 days | |
Stock options weighted-average remaining contractual term in years, options exercisable at June 30, 2020 | 5 years 6 months | |
Stock options aggregate intrinsic value, outstanding at January 1, 2020 | $ 236 | |
Stock options aggregate intrinsic value, outstanding at June 30, 2020 | 142 | $ 236 |
Stock options aggregate intrinsic value, vested or expected to vest at June 30, 2020 | 142 | |
Stock options aggregate intrinsic value, options exercisable at June 30, 2020 | $ 125 | |
Retention Awards [Member] | ||
Awards Activity [Abstract] | ||
Awards, shares nonvested at January 1, 2020 | 1,898 | |
Awards, shares granted | 304 | |
Awards, shares vested | (611) | |
Awards, shares forfeited | (36) | |
Awards, shares nonvested at June 30, 2020 | 1,555 | 1,898 |
Awards weighted-average grant-date fair value, nonvested at January 1, 2020 | $ 112.12 | |
Awards weighted-average grant-date fair value, granted | 185.97 | |
Awards weighted-average grant-date fair value, vested | 76.13 | |
Awards weighted-average grant-date fair value, forfeited | 136.99 | |
Awards weighted-average grant-date fair value, nonvested at June 30, 2020 | $ 140.12 | $ 112.12 |
Performance Retention Awards [Member] | ||
Awards Activity [Abstract] | ||
Awards, shares nonvested at January 1, 2020 | 929 | |
Awards, shares granted | 287 | |
Awards, shares vested | (339) | |
Awards, shares unearned | (8) | |
Awards, shares forfeited | (35) | |
Awards, shares nonvested at June 30, 2020 | 834 | 929 |
Awards weighted-average grant-date fair value, nonvested at January 1, 2020 | $ 123.32 | |
Awards weighted-average grant-date fair value, granted | 166.63 | |
Awards weighted-average grant-date fair value, vested | 102.91 | |
Awards weighted-average grant-date fair value, unearned | 150.42 | |
Awards weighted-average grant-date fair value, forfeited | 138.98 | |
Awards weighted-average grant-date fair value, nonvested at June 30, 2020 | $ 145.60 | $ 123.32 |
Stock-based Compensation (Sch_4
Stock-based Compensation (Schedule of Stock Option Exercises) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock Option Aggregate Disclosures [Abstract] | ||||
Intrinsic value of stock options exercised | $ 17 | $ 26 | $ 65 | $ 164 |
Cash received from option exercises | 18 | 26 | 51 | 98 |
Treasury shares repurchased for employee payroll taxes | (4) | (7) | (12) | (29) |
Tax benefit realized from option exercises | 3 | 6 | 14 | 40 |
Aggregate grant-date fair value of stock options vested | $ 14 | $ 15 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Net Periodic Pension And OPEB Cost [Abstract] | |||||
Changes in fair value | 5 years | ||||
Defined Benefit Plan, Accumulated Benefit Obligation, Increase (Decrease) for Plan Amendment | $ (92,000,000) | $ (92,000,000) | $ (92,000,000) | ||
Other comprehensive income defined benefit plans | 69,000,000 | $ (18,000,000) | (82,000,000) | $ (40,000,000) | (92,000,000) |
Deferred Tax Assets, Gross | $ 23,000,000 | 23,000,000 | 23,000,000 | ||
Future net peroidic OPEB cost amortization duration | 8 years | ||||
Defined Benefit Plans [Member] | |||||
Net Periodic Pension And OPEB Cost [Abstract] | |||||
Service cost | 26,000,000 | 22,000,000 | 53,000,000 | 44,000,000 | |
Interest cost | 35,000,000 | 40,000,000 | 69,000,000 | 80,000,000 | |
Expected return on plan assets | (70,000,000) | (68,000,000) | (140,000,000) | (136,000,000) | |
Amortization of actuarial loss | 24,000,000 | 16,000,000 | 52,000,000 | 32,000,000 | |
Net periodic cost | 15,000,000 | 10,000,000 | 34,000,000 | 20,000,000 | |
Voluntary cash contributions to qualified pension plan | 0 | ||||
OPEB [Member] | |||||
Net Periodic Pension And OPEB Cost [Abstract] | |||||
Service cost | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | |
Interest cost | 2,000,000 | 2,000,000 | 3,000,000 | 5,000,000 | |
Amortization of prior service cost | (4,000,000) | (7,000,000) | |||
Amortization of actuarial loss | 2,000,000 | 2,000,000 | 4,000,000 | 3,000,000 | |
Net periodic cost | $ 1,000,000 | $ 5,000,000 | $ 1,000,000 | $ 9,000,000 |
Other Income (Details)
Other Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Other Income [Abstract] | |||||
Net gain on non-operating asset dispositions. | [1] | $ 83 | $ 6 | $ 94 | $ 10 |
Rental income | 30 | 33 | 61 | 62 | |
Net periodic pension and OPEB costs | 11 | 8 | 19 | 16 | |
Interest Income | 3 | 6 | 9 | 15 | |
Interest income due to employment tax refund | 3 | 30 | |||
Non-operating environmental costs and other | 4 | 1 | 1 | 1 | |
Total | 131 | $ 57 | 184 | $ 134 | |
Land and permanent easement sale | $ 69 | $ 69 | |||
[1] | 2020 includes a $ 69 million gain from a land and permanent easement sale to the Illinois State Toll Highway Authority. |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | Jun. 30, 2020USD ($) |
Unrecognized Tax Benefits [Abstract] | |
Net unrecognized tax benefit liability | $ 69 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share Details [Abstract] | ||||
Net income | $ 1,132 | $ 1,570 | $ 2,606 | $ 2,961 |
Weighted-Average Number Of Shares Outstanding | ||||
Basic | 677.7 | 705.5 | 681 | 711.2 |
Dilutive effect of stock options | 0.7 | 1.3 | 0.8 | 1.3 |
Dilutive effect of retention shares and units | 0.8 | 1.2 | 0.9 | 1.3 |
Diluted | 679.2 | 708 | 682.7 | 713.8 |
Earnings per share - basic | $ 1.67 | $ 2.23 | $ 3.83 | $ 4.16 |
Earnings per share - diluted | $ 1.67 | $ 2.22 | $ 3.82 | $ 4.15 |
Stock options excluded as their inclusion would be anti-dilutive | 1 | 0.6 | 0.8 | 0.5 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income/(Loss) (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||||
Beginning balance | $ (1,329) | $ (1,378) | $ (1,356) | $ (1,415) | ||||||
Other comprehensive income/(loss) before reclassifications | (60) | (24) | (53) | |||||||
Amounts reclassified from accumulated other comprehensive income/(loss) | [1] | 17 | 12 | 37 | 25 | |||||
OPEB Plan amendment (Note 5) | $ 92 | 92 | 92 | |||||||
Net to-date other comprehensive income/(loss), net of taxes | (43) | [2] | 80 | [2] | (16) | [3] | 117 | [3] | ||
Balance at June 30 | (1,298) | (1,372) | (1,298) | (1,372) | (1,298) | |||||
Deferred taxes activity other comprehensive income/(loss) | (5) | (27) | (12) | (31) | ||||||
Defined Benefit Plans [Member] | ||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||||
Beginning balance | (1,128) | (1,182) | (1,150) | (1,192) | ||||||
Other comprehensive income/(loss) before reclassifications | 1 | (22) | 3 | (25) | ||||||
Amounts reclassified from accumulated other comprehensive income/(loss) | [1] | 17 | 12 | 37 | 25 | |||||
OPEB Plan amendment (Note 5) | 92 | 92 | ||||||||
Net to-date other comprehensive income/(loss), net of taxes | 18 | 82 | 40 | 92 | ||||||
Balance at June 30 | (1,100) | (1,110) | (1,100) | (1,110) | (1,100) | |||||
Foreign Currency Translation [Member] | ||||||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||||||
Beginning balance | (201) | (196) | (206) | (223) | ||||||
Other comprehensive income/(loss) before reclassifications | (61) | (2) | (56) | 25 | ||||||
Net to-date other comprehensive income/(loss), net of taxes | (61) | (2) | (56) | 25 | ||||||
Balance at June 30 | $ (198) | $ (262) | $ (198) | $ (262) | $ (198) | |||||
[1] | The accumulated other comprehensive income/(loss) reclassification components are 1) prior service cost/(credit) and 2) net actuarial loss which are both included in the computation of net periodic pension cost. See Note 5 Retirement Plans for additional details. | |||||||||
[2] | Net of deferred taxes of ($ 5 ) million and ($ 27 ) million during the three months ended June 30, 2020, and 2019, respectively. | |||||||||
[3] | Net of deferred taxes of ($ 12 ) million and ($ 31 ) million during the six months ended June 30, 2020, and 2019, respectively. |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Accounts Receivable Details [Abstract] | |||||
Allowance for doubtful accounts | $ 20 | $ 20 | $ 4 | ||
Allowance for doubtful accounts - receivables not expected to be collected in one year | 44 | 44 | 35 | ||
Receivables Securitization Facility [Abstract] | |||||
Total capacity to transfer undivided interests to investors under the receivables securitization facility | 800 | $ 800 | |||
Receivables securitization facility maturity date | 2022-07 | ||||
Receivables securitization facility duration | 3 years | ||||
Value of the outstanding undivided interest held by investors under the receivables securitization facility | 400 | $ 400 | 400 | ||
Accounts receivable supporting the undivided interest held by investors | 1,100 | 1,100 | $ 1,300 | ||
Cost of the receivables securitization facility - interest expense | $ 1 | $ 3 | $ 4 | $ 7 |
Properties (Details)
Properties (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | ||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 75,017 | $ 74,246 | |
Accumulated depreciation | 20,747 | 20,330 | |
Net book value | 54,270 | 53,916 | |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 5,274 | 5,276 | |
Net book value | 5,274 | 5,276 | |
Road: Rail and Other Track Material [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 17,391 | 17,178 | |
Accumulated depreciation | 6,496 | 6,381 | |
Net book value | $ 10,895 | $ 10,797 | |
Estimated useful life | 42 years | 42 years | |
Road: Ties [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 10,886 | $ 10,693 | |
Accumulated depreciation | 3,264 | 3,186 | |
Net book value | $ 7,622 | $ 7,507 | |
Estimated useful life | 34 years | 34 years | |
Road: Ballast [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 5,855 | $ 5,752 | |
Accumulated depreciation | 1,704 | 1,669 | |
Net book value | $ 4,151 | $ 4,083 | |
Estimated useful life | 34 years | 34 years | |
Road: Other Roadway [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | [1] | $ 20,629 | $ 20,331 |
Accumulated depreciation | [1] | 4,195 | 4,056 |
Net book value | [1] | $ 16,434 | $ 16,275 |
Estimated useful life | [1] | 48 years | 48 years |
Total Road [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 54,761 | $ 53,954 | |
Accumulated depreciation | 15,659 | 15,292 | |
Net book value | 39,102 | 38,662 | |
Equipment: Locomotives [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 9,400 | 9,467 | |
Accumulated depreciation | 3,456 | 3,434 | |
Net book value | $ 5,944 | $ 6,033 | |
Estimated useful life | 17 years | 18 years | |
Equipment: Freight Cars [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 2,095 | $ 2,083 | |
Accumulated depreciation | 784 | 779 | |
Net book value | $ 1,311 | $ 1,304 | |
Estimated useful life | 24 years | 25 years | |
Equipment: Work Equipment and Other [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 1,098 | $ 1,081 | |
Accumulated depreciation | 338 | 322 | |
Net book value | $ 760 | $ 759 | |
Estimated useful life | 18 years | 18 years | |
Total Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 12,593 | $ 12,631 | |
Accumulated depreciation | 4,578 | 4,535 | |
Net book value | 8,015 | 8,096 | |
Technology and Other [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 1,196 | 1,136 | |
Accumulated depreciation | 510 | 503 | |
Net book value | $ 686 | $ 633 | |
Estimated useful life | 12 years | 12 years | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 1,193 | $ 1,249 | |
Net book value | $ 1,193 | $ 1,249 | |
[1] | Other roadway includes grading, bridges and tunnels, signals, buildings, and other road assets. |
Accounts Payable And Other Cu_3
Accounts Payable And Other Current Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts Payable and Other Current Liabilities Details [Abstract] | ||
Income and other taxes payable | $ 970 | $ 496 |
Accounts payable | 595 | 749 |
Accrued wages and vacation | 345 | 370 |
Interest payable | 342 | 289 |
Current liabilities operating leases (Note 16) | 319 | 362 |
Accrued casualty costs | 182 | 190 |
Equipment rents payable | 83 | 100 |
Other | 453 | 538 |
Total accounts payable and other current liabilities | $ 3,289 | $ 3,094 |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Short-Term Investments [Abstract] | ||
Short-term investments | $ 60 | $ 60 |
Short-term investments reclassified as other assets | 15 | |
Fair Value of Debt Instruments [Abstract] | ||
Fair value of total debt | 33,600 | 27,200 |
Fair value of total debt in excess of (less than) carrying value | 5,200 | $ 2,000 |
Significant Other Observable Inputs (Level 2) [Member] | Time Deposits [Member] | ||
Short-Term Investments [Abstract] | ||
Short-term investments | $ 75 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | 2 Months Ended | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||||
Facility expiration date | May 18, 2021 | |||
Commercial paper issued | $ 1,500,000,000 | |||
Commercial paper repaid | $ 1,500,000,000 | |||
Commercial paper maturity duration minimum | 14 days | |||
Commercial paper maturity duration maximum | 39 days | |||
Commercial paper outstanding | $ 200,000,000 | $ 200,000,000 | $ 200,000,000 | |
Credit available under line of credit | 600,000,000 | 600,000,000 | 600,000,000 | |
Amount drawn under line of credit | 300,000,000 | |||
Repayments of line of credit | 0 | |||
Amount outstanding under line of credit | 300,000,000 | 300,000,000 | 300,000,000 | |
Board of Directors authorized debt issuance | $ 6,000,000,000 | |||
Board of Directors remaining debt issuance | 2,250,000,000 | 2,250,000,000 | 2,250,000,000 | |
Secured debt under receivables securitization facility | 400,000,000 | 400,000,000 | 400,000,000 | $ 400,000,000 |
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility available credit | 2,000,000,000 | 2,000,000,000 | $ 2,000,000,000 | |
Facility expiration date | Jun. 8, 2023 | |||
Credit facility term | 5 years | |||
Revolving credit facility withdrawals | 0 | 0 | $ 0 | |
Allowable debt per debt to earnings before interest taxes depreciation and amortization coverage ratio (as defined in the facility) | 36,900,000,000 | |||
Outstanding debt (as defined by facility) | 29,700,000,000 | 29,700,000,000 | 29,700,000,000 | |
Cross-default provision (as defined by facility) | $ 150,000,000 | $ 150,000,000 | $ 150,000,000 |
Debt (Unsecured Fixed Rate Debt
Debt (Unsecured Fixed Rate Debt Securities Issued Under Current Shelf Registration) (Details) - Unsecured Debt [Member] - USD ($) | 6 Months Ended | ||
Jun. 30, 2020 | Apr. 07, 2020 | Jan. 31, 2020 | |
2.150% Notes Due 2027 [Member] | |||
Debt Instrument [Line Items] | |||
Issuance date | Jan. 31, 2020 | ||
Note amount | $ 500,000,000 | ||
Interest rate | 2.15% | ||
Maturity date | Feb. 5, 2027 | ||
2.400% Notes Due 2030 [Member] | |||
Debt Instrument [Line Items] | |||
Issuance date | Jan. 31, 2020 | ||
Note amount | $ 750,000,000 | ||
Interest rate | 2.40% | ||
Maturity date | Feb. 5, 2030 | ||
3.250% Notes Due 2050 [Member] | |||
Debt Instrument [Line Items] | |||
Issuance date | Jan. 31, 2020 | ||
Note amount | $ 1,000,000,000 | ||
Interest rate | 3.25% | ||
Maturity date | Feb. 5, 2050 | ||
3.750% Notes Due 2070 [Member] | |||
Debt Instrument [Line Items] | |||
Issuance date | Jan. 31, 2020 | ||
Note amount | $ 750,000,000 | ||
Interest rate | 3.75% | ||
Maturity date | Feb. 5, 2070 | ||
3.250% Notes Due 2050 .[Member] | |||
Debt Instrument [Line Items] | |||
Issuance date | Apr. 7, 2020 | ||
Note amount | $ 750,000,000 | ||
Interest rate | 3.25% | ||
Maturity date | Feb. 5, 2050 |
Variable Interest Entities (Det
Variable Interest Entities (Details) $ in Billions | Jun. 30, 2020USD ($) |
Variable Interest Entities Details [Abstract] | |
Future minimum lease payments | $ 1.3 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - Minimum [Member] | Jun. 30, 2020 |
Finance lease, renewal term | 12 months |
Operating lease, renewal term | 12 months |
Leases (Lease Assets and Liabil
Leases (Lease Assets and Liabilities) (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 | |
Operating leases | $ 1,700 | $ 1,812 | |
Finance leases | [1] | 427 | 468 |
Total leased assets | 2,127 | 2,280 | |
Current liabilities operating leases (Note 16) | 319 | 362 | |
Current liabilities finance | 105 | 114 | |
Noncurrent liabilities operating | 1,320 | 1,471 | |
Noncurrent liabilities finance | 427 | 491 | |
Total lease liabilities | 2,171 | 2,438 | |
Accumulated depreciation | 20,747 | 20,330 | |
Finance Lease Assets [Member] | |||
Accumulated depreciation | $ 774 | $ 797 | |
[1] | Finance lease assets are recorded net of accumulated amortization of $ 774 million and $ 797 million as of June 30, 2020 and December 31, 2019. |
Leases (Lease Cost) (Details)
Leases (Lease Cost) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Leases [Abstract] | |||||
Operating lease cost | [1] | $ 68 | $ 85 | $ 137 | $ 178 |
Amortization of leased assets | 17 | 18 | 34 | 36 | |
Interest on lease liabilities | 7 | 8 | 14 | 17 | |
Lease, Cost | 92 | 111 | 185 | 231 | |
Short-term operating lease cost | 0.6 | 0.2 | 0.8 | 0.4 | |
Variable operating lease cost | $ 1.4 | $ 2.1 | $ 3.2 | $ 4 | |
[1] | Includes short-term lease costs of $ 0.6 million and $ 0.2 million for the three months ended June 30, 2020, and 2019, respectively, and $ 0.8 million and $ 0.4 million for the six months ended June 30, 2020, and 2019, respectively, and variable lease costs of $ 1.4 million and $ 2.1 million for the three months ended June 30, 2020, and 2019, respectively, and $ 3.2 million and $ 4.0 million for the six months ended June 30, 2020, and 2019, respectively. |
Leases (Schedule of Aggregate L
Leases (Schedule of Aggregate Lease Maturities) (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Future Minimum Lease Payments For Operating Leases [Abstract] | ||
Minimum operating lease payments - 2020 | $ 103 | |
Minimum operating lease payments - 2021 | 302 | |
Minimum operating lease payments - 2022 | 267 | |
Minimum operating lease payments - 2023 | 225 | |
Minimum operating lease payments - 2024 | 216 | |
Minimum operating lease payments - later years | 781 | |
Total operating lease payments | 1,894 | |
Operating lease payments - amount representing interest | 255 | |
Operating lease liabilities - present value of minimum lease liabilities | 1,639 | |
Future Minimum Lease Payments For Finance Leases [Abstract] | ||
Minimum finance lease payments - 2020 | 62 | |
Minimum finance lease payments - 2021 | 142 | |
Minimum finance lease payments - 2022 | 127 | |
Minimum finance lease payments - 2023 | 88 | |
Minimum finance lease payments - 2024 | 75 | |
Minimum finance lease payments - later years | 124 | |
Total finance lease payments | 618 | |
Finance lease payments - amount representing interest | 86 | |
Finance lease liabilities - present value of minimum lease liabilities | 532 | |
Minimum lease payments - 2020 | 165 | |
Minimum lease payments - 2021 | 444 | |
Minimum lease payments - 2022 | 394 | |
Minimum lease payments - 2023 | 313 | |
Minimum lease payments - 2024 | 291 | |
Minimum lease payments - later years | 905 | |
Total minimum lease payments | 2,512 | |
Lease payments - amount representing interest | 341 | |
Total lease liabilities | $ 2,171 | $ 2,438 |
Leases (Lease Term and Discount
Leases (Lease Term and Discount Rate) (Details) | Jun. 30, 2020 |
Leases [Abstract] | |
Weighted-average remaining lease term (years) operating leases | 8 years 2 months 12 days |
Weighted-average remaining lease term finance leases | 5 years 8 months 12 days |
Weighted average discount rate operating leases | 3.70% |
Weighted average discount rate finance leases | 5.10% |
Leases (Other Information) (Det
Leases (Other Information) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 252 | $ 255 |
Operating cash flows from finance leases | 15 | 20 |
Financing cash flows from finance leases | 66 | 79 |
Leased assets obtained in exchange for new operating lease liabilities | $ 50 | $ 27 |
Commitments And Contingencies_2
Commitments And Contingencies (Narrative) (Details) | 6 Months Ended | |
Jun. 30, 2020USD ($)item | Dec. 31, 2019USD ($) | |
Commitments and Contingencies [Line Items] | ||
Sites identified which we are or may be liable for remediation costs | item | 379 | |
Sites subject of actions taken by the U.S. government | item | 31 | |
Sites on the Superfund National Priorities List | item | 20 | |
Personal Injury [Member] | ||
Commitments and Contingencies [Line Items] | ||
Percent of liability recorded related to asserted claims | 95.00% | |
Percent of liability recorded related to unasserted claims | 5.00% | |
Personal Injury [Member] | Minimum [Member] | ||
Commitments and Contingencies [Line Items] | ||
Reasonably possible outcome of related claims | $ 259,000,000 | |
Personal Injury [Member] | Maximum [Member] | ||
Commitments and Contingencies [Line Items] | ||
Reasonably possible outcome of related claims | 283,000,000 | |
Guarantees [Member] | ||
Commitments and Contingencies [Line Items] | ||
Maximum potential amount of guarantee payments | 15,000,000 | $ 15,000,000 |
Recorded liability for fair value of guarantees | $ 0 | $ 0 |
Expiration year of final guarantee | The final guarantee expires in 2022 |
Commitments And Contingencies_3
Commitments And Contingencies (Commitments And Contingencies Activity) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Liability Activity [Abstract] | ||
Current portion, ending balance at June 30 | $ 182 | |
Environmental [Abstract] | ||
Beginning balance. | 227 | $ 223 |
Accruals | 28 | 32 |
Payments | (27) | (35) |
Ending balance at June 30. | 228 | 220 |
Current portion, ending balance at June 30. | 63 | 63 |
Personal Injury [Member] | ||
Liability Activity [Abstract] | ||
Beginning balance | 265 | 271 |
Current year accruals | 34 | 36 |
Changes in estimates for prior years | (4) | (11) |
Payments | (36) | (31) |
Ending balance at June 30 | 259 | 265 |
Current portion, ending balance at June 30 | $ 65 | $ 63 |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | 162 Months Ended | ||||||||
Mar. 31, 2019 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Apr. 01, 2019 | |||
Shares Repurchased [Line Items] | |||||||||||||
BOD authorized | 150,000,000 | ||||||||||||
Stock repurchase program expiration date | Mar. 31, 2022 | ||||||||||||
Aggregate cost | $ 639 | $ 2,956 | $ 4,148 | $ 39,700 | |||||||||
Shares repurchased | 14,305,793 | [1] | 3,732,974 | 18,149,450 | [1] | 14,305,793 | 21,882,424 | ||||||
Average purchase price | $ 178.66 | [1] | $ 171.24 | $ 165.79 | [1] | $ 178.66 | $ 166.72 | ||||||
Remaining number of shares that may be repurchased under current authority | 118,849,288 | 118,849,288 | 118,849,288 | ||||||||||
Treasury stock, value | $ 38,984 | $ 38,984 | $ 38,984 | $ 36,424 | |||||||||
Accelerated Share Repurchase Agreement [Member] | |||||||||||||
Shares Repurchased [Line Items] | |||||||||||||
Aggregate cost | $ 2,500 | $ 2,000 | |||||||||||
Shares repurchased | 11,795,930 | 8,786,380 | 3,172,900 | 11,795,930 | 8,786,380 | ||||||||
Treasury stock, value | $ 1,600 | 1,600 | 1,600 | ||||||||||
Paid-in capital, value | $ 400 | $ 400 | $ 400 | ||||||||||
[1] | Includes 8,786,380 and 11,795,930 shares repurchased in February 2020 and 2019, respectively, under accelerated share repurchase programs. |
Related Parties (Details)
Related Parties (Details) - TTX Company [Member] - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 36.79% | 36.79% | |||
Equity Method Investments | $ 1,400 | $ 1,400 | $ 1,400 | ||
Related Party Transaction, Expenses from Transactions with Related Party | 88 | $ 108 | 184 | $ 215 | |
Accounts Payable, Related Parties, Current | $ 61 | $ 61 | $ 62 |