Union Pacific Corporation (NYSE:UNP) Q2 2020 Earnings Conference Call - Final Transcript

Jul 23, 2020 • 08:45 am ET


Union Pacific Corporation (NYSE:UNP) Q2 2020 Earnings Conference Call - Final Transcript


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Greetings, and welcome to the Union Pacific Second Quarter 2020 Conference Call. [Operator Instructions] And the slides for today's presentation are available on Union Pacific's website.

It is now my pleasure to introduce your host, Mr. Lance Fritz, Chairman, President and CEO for Union Pacific. Mr. Fritz, you may begin.

Lance M. Fritz

Thank you very much, Rob, and good morning everybody and welcome to Union Pacific's second quarter earnings conference call. With me today, in Omaha, practicing safe social distancing, are Jim Vena, Chief Operating Officer; Kenny Rocker, Executive Vice President of Marketing and Sales; and Jennifer Hamann, Chief Financial Officer.

Before we discuss our second quarter results, I must first recognize the continued dedication of the women and men of Union Pacific. As we navigate the COVID-19 pandemic, our employees are protecting themselves and their co-workers in order to provide our customers with a service product that's fluid and uninterrupted. Our rail network continues to operate at a very high level as we provide a safer more reliable and more efficient service product to our customers. As I reflect on what we've dealt with and the results of the quarter, the true character of our organization was revealed and it makes me very proud of the entire Union Pacific team.

Moving on to the second quarter results, this morning Union Pacific is reporting 2020 second quarter net income of $1.1 billion or $1.67 per share. This compares to $1.6 billion or $2.22 per share in the second quarter of 2019. Reflecting the economic impact of the pandemic and the challenge of overcoming a 24% decline in revenue, our quarterly operating ratio came in at 61%, a 1.4 percentage point increase compared to the second quarter of 2019.

Despite the distractions created by the pandemic, our employees made progress on safety in the second quarter. For the first half of 2020, our employee safety results improved 5% versus 2019. I am very appreciative of our employees' continued focus on safety. Our second quarter results represent an achievement by the entire UP team as we dealt with the challenge unlike anything we've seen before. The women and men of Union Pacific answered the call to serve our customers. And the results provide further confirmation of the transformation our company has made through Unified Plan 2020.

So, with that, I'll turn it over to Jim to provide an operations update.

Jim Vena

Thank you, Lance, and good morning everyone. Let me start by echoing Lance's comments on how the UP team has performed throughout the pandemic. I'm extremely proud of the team's dedication to providing the safe and reliable service product to our customers. Our rail network remains fluid, I also want to commend the operating department on its performance over the past quarter, how the team managed through the rapid decline and eventual return of volume has been truly remarkable.

The impact of all the changes we made is evident in our results this quarter. There remain many more opportunities ahead of us to further improve