Union Pacific Corp.

Record 2Q 2026 financials; strong core improvement - Union Pacific reported record net income of ~$2B and EPS of $3.36 (reported), or $3.41 adjusted for merger costs. - Operating ratio: 59.2%, ~10 bps better than last year *after* removing one-time/“in-and-outs” effects (e.g., fuel impacts and prior-year items). - Top line strength: Operating revenue $6.9B (+12% YoY); freight revenue $6.5B (+12%).

Volume + pricing resilience, with fuel the biggest swing factor (netting to a small “gain”) - Freight revenue drivers: volume +225 bps, fuel surcharge +750 bps (≈ +$460M from higher year-over-year fuel prices/volume), core pricing & mix +175 bps. - Business mix slight headwind: domestic intermodal grew faster than expected, offsetting some mix benefit from less international intermodal. - Fuel expense surged: +63% YoY (avg fuel price $2.42 → $3.86) and added ~120 bps to operating ratio. - Management notes a ~$0.14 fuel “gain” reflects the net difference between surcharge revenue and fuel expense (so not purely beneficial to operating ratio, but beneficial overall).

Cost and productivity: wage pressure but offset by operational efficiency; raised outlook - Expenses: total operating expenses $4.1B (+13% YoY) largely due to diesel fuel; compensation & benefits +1% YoY (but that includes a prior-year $55M buyout). - Excluding the buyout, cost per employee up ~7%, driven by wage/benefit inflation; workforce productivity delivered 8 consecutive quarters of record results. - Full-year compensation per employee expected to rise ~6% going forward. - Cash/returns: cash from operations $5.5B (+21%); free cash flow $1.8B; dividend paid and $1.5B long-term debt reduced in 1H 2026; adjusted debt/EBITDA ~2.5x.