Union Pacific (UNP) NYSE 2026 European Investor Conference summary

Operational performance and market trends

• Volumes are up 2% quarter-to-date, with premium and industrial segments showing strong growth, while coal and international intermodal are down year-over-year.

• Freight car velocity exceeds 230 miles per day, terminal dwell remains under 20 hours, and the service performance index has improved, supporting high service levels and network fluidity.

• Industrial chemicals and plastics are up 4%, metals and minerals up 3%, and grain products up 12% quarter-to-date, with domestic intermodal driving volume growth.

• Service levels are at or near multi-year highs, with operational efficiency allowing more business on fewer trains.

• Technology and business development are driving efficiency and customer expansion, especially in high-growth regions like Texas and Arizona.

Merger process and strategic outlook

• The STB has accepted the merger application with Norfolk Southern, starting a 12-month review clock, with supplemental information due by late July and approval anticipated by mid-2027.

• The merger aims to remove over 2.1 million truckloads from highways, delivering $3.5 billion in annual customer savings and enhancing rail competition.

• Expected synergies include $1.8 billion in net EBITDA from revenue and $1 billion in cost savings, with $2 billion in capital investment over three years.

• Merger benefits include expanded competition, lower prices for single-line shipments, committed gateway pricing, and improved coast-to-coast service with new intermodal and manifest products.

• The company is confident in the public interest benefits and competitive enhancements, despite competitor objections and regulatory risks.

Financials, pricing, and capital allocation

• Pricing is targeted above inflation, with the ability to adjust based on market dynamics and service quality.

• Domestic intermodal is benefiting from high truck rates and strong service, while international intermodal remains steady.

• CapEx commitments have been slightly adjusted downward, reflecting business mix changes, but ongoing investment in safety and modernization continues.

• Operating ratio for 1Q 2026 stands at 68.8%, with fuel costs being the main variable impacting margins.

• Free cash flow is being used to pay down debt while maximizing yield on excess cash during the merger process.