Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | Apr. 11, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Document type | '10-Q | ' |
Document period end date | 31-Mar-14 | ' |
Amendment flag | 'false | ' |
Entity registrant name | 'UNION PACIFIC CORPORATION | ' |
Entity central index key | '0000100885 | ' |
Entity current reporting status | 'Yes | ' |
Entity voluntary filers | 'No | ' |
Current fiscal year end date | '--12-31 | ' |
Entity filer category | 'Large Accelerated Filer | ' |
Entity well known seasoned issuer | 'Yes | ' |
Entity common stock shares outstanding | ' | 452,911,741 |
Document fiscal year focus | '2014 | ' |
Document fiscal period focus | 'Q1 | ' |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (Unaudited) (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Operating revenues [Abstract] | ' | ' |
Freight revenues | $5,286 | $4,984 |
Other revenues | 352 | 306 |
Total operating revenues | 5,638 | 5,290 |
Operating expenses [Abstract] | ' | ' |
Compensation and benefits | 1,254 | 1,216 |
Fuel | 921 | 900 |
Purchased services and materials | 607 | 557 |
Depreciation | 464 | 434 |
Equipment and other rents | 312 | 313 |
Other | 226 | 237 |
Total operating expenses | 3,784 | 3,657 |
Operating income | 1,854 | 1,633 |
Other income (Note 5) | 38 | 40 |
Interest expense | -133 | -128 |
Income before income taxes | 1,759 | 1,545 |
Income taxes | -671 | -588 |
Net income | $1,088 | $957 |
Share and Per Share (Note 7) [Abstract] | ' | ' |
Earnings per share - basic | $2.40 | $2.05 |
Earnings per share - diluted | $2.38 | $2.03 |
Weighted average number of shares - basic | 454.1 | 467.8 |
Weighted average number of shares - diluted | 456.2 | 470.5 |
Dividends declared per share | $0.91 | $0.69 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Condensed Consolidated Statements of Comprehensive Income (Unaudited) [Abstract] | ' | ' | ||
Net income | $1,088 | $957 | ||
Other comprehensive income/(loss): | ' | ' | ||
Defined benefit plans | 20 | 14 | ||
Foreign currency translation | -4 | 3 | ||
Total other comprehensive income/(loss) | 16 | [1] | 17 | [1] |
Comprehensive income | $1,104 | $974 | ||
[1] | Net of deferred taxes of $5 million and $12 million during the three months ended March 31, 2014, and 2013, respectively. |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parentheticals) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parentheticals) [Abstract] | ' | ' |
Deferred taxes activity other comprehensive income/(loss) | $5 | $12 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Financial Position (Unaudited) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets [Abstract] | ' | ' |
Cash and cash equivalents | $1,857 | $1,432 |
Accounts receivable, net (Note 9) | 1,542 | 1,414 |
Materials and supplies | 705 | 653 |
Current deferred income taxes | 259 | 268 |
Other current assets | 316 | 223 |
Total current assets | 4,679 | 3,990 |
Investments | 1,344 | 1,321 |
Net properties (Note 10) | 44,189 | 43,749 |
Other assets | 686 | 671 |
Total assets | 50,898 | 49,731 |
Current liabilities [Abstract] | ' | ' |
Accounts payable and other current liabilities (Note 11) | 3,556 | 3,086 |
Debt due within one year (Note 13) | 632 | 705 |
Total current liabilities | 4,188 | 3,791 |
Debt due after one year (Note 13) | 9,544 | 8,872 |
Deferred income taxes | 14,229 | 14,163 |
Other long-term liabilities | 1,665 | 1,680 |
Commitments and contingencies (Note 15) | ' | ' |
Total liabilities | 29,626 | 28,506 |
Common shareholders' equity [Abstract] | ' | ' |
Common shares, $2.50 par value, 800,000,000 authorized; 555,066,436 and 554,828,826 issued; 453,006,906 and 456,000,998 outstanding, respectively | 1,388 | 1,387 |
Paid-in-surplus | 4,233 | 4,210 |
Retained earnings | 25,962 | 25,288 |
Treasury stock | -9,577 | -8,910 |
Accumulated other comprehensive loss (Note 8) | -734 | -750 |
Total common shareholders' equity | 21,272 | 21,225 |
Total liabilities and common shareholders' equity | $50,898 | $49,731 |
Condensed_Consolidated_Stateme4
Condensed Consolidated Statements of Financial Position (Unaudited) (Parentheticals) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Condensed Consolidated Statements of Financial Position (Unaudited) (Parentheticals) [Abstract] | ' | ' |
Common shares, par value | $2.50 | $2.50 |
Common shares authorized | 800,000,000 | 800,000,000 |
Common shares issued | 555,066,436 | 554,828,826 |
Common shares outstanding | 453,006,906 | 456,000,998 |
Condensed_Consolidated_Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Operating Activities [Abstract] | ' | ' |
Net income | $1,088 | $957 |
Adjustments to reconcile net income to cash provided by operating activities [Abstract] | ' | ' |
Depreciation | 464 | 434 |
Deferred income taxes and unrecognized tax benefits | 75 | 184 |
Other operating activities, net | -57 | 4 |
Changes in current assets and liabilities [Abstract] | ' | ' |
Accounts receivable, net | -128 | -181 |
Materials and supplies | -52 | 5 |
Other current assets | -93 | -14 |
Accounts payable and other current liabilities | 84 | -82 |
Income and other taxes payable | 386 | 217 |
Cash provided by operating activities | 1,767 | 1,524 |
Investing Activities [Abstract] | ' | ' |
Capital investments | -893 | -782 |
Proceeds from asset sales | 27 | 17 |
Other investing activities, net | -39 | -35 |
Cash used in investing activities | -905 | -800 |
Financing Activities [Abstract] | ' | ' |
Debt issued (Note 13) | 995 | 944 |
Common share repurchases (Note 16) | -644 | -374 |
Debt repaid | -402 | -83 |
Dividends paid | -363 | -323 |
Other financing activities, net | -23 | -34 |
Cash (used in)/provided by financing activities | -437 | 130 |
Net change in cash and cash equivalents | 425 | 854 |
Cash and cash equivalents at beginning of year | 1,432 | 1,063 |
Cash and cash equivalents at end of period | 1,857 | 1,917 |
Non-cash investing and financing activities [Abstract] | ' | ' |
Cash dividends declared but not yet paid | 407 | 318 |
Capital investments accrued but not yet paid | 109 | 107 |
Common shares repurchased but not yet paid | 39 | 20 |
Cash paid for: [Abstract] | ' | ' |
Income taxes, net of refunds | -146 | -39 |
Interest, net of amounts capitalized | ($178) | ($179) |
Condensed_Consolidated_Stateme6
Condensed Consolidated Statements of Changes in Common Shareholders' Equity (Unaudited) (USD $) | Total | Common Shares (Units) [Member] | Treasury Shares (Units) [Member] | Common Shares [Member] | Paid-in-Surplus [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income/(Loss) (Note 8) [Member] | |
In Millions, except Share data, unless otherwise specified | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||
Shareholders' equity, beginning balance at Dec. 31, 2012 | $19,877 | ' | ' | $1,386 | $4,113 | $22,271 | ($6,707) | ($1,186) | |
Common shares, beginning balance at Dec. 31, 2012 | ' | 554,600,000 | -85,100,000 | ' | ' | ' | ' | ' | |
Comprehensive income [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | |
Net income | 957 | ' | ' | ' | ' | 957 | ' | ' | |
Other comp. income | [1] | 17 | ' | ' | ' | ' | ' | ' | 17 |
Conversion, stock option exercises, forfeitures, and other | 10 | ' | ' | 1 | 21 | ' | -12 | ' | |
Conversion, stock option exercises, forfeitures, and other (shares) | ' | 200,000 | 300,000 | ' | ' | ' | ' | ' | |
Share repurchases (Note 16) | -394 | ' | ' | ' | ' | ' | -394 | ' | |
Share repurchases (Note 16) (Shares) | -2,881,400 | ' | -2,900,000 | ' | ' | ' | ' | ' | |
Cash dividends declared | -323 | ' | ' | ' | ' | -323 | ' | ' | |
Shareholders' equity, ending balance at Mar. 31, 2013 | 20,144 | ' | ' | 1,387 | 4,134 | 22,905 | -7,113 | -1,169 | |
Common shares, ending balance at Mar. 31, 2013 | ' | 554,800,000 | -87,700,000 | ' | ' | ' | ' | ' | |
Shareholders' equity, beginning balance at Dec. 31, 2013 | 21,225 | ' | ' | 1,387 | 4,210 | 25,288 | -8,910 | -750 | |
Common shares, beginning balance at Dec. 31, 2013 | 456,000,998 | 554,800,000 | -98,800,000 | ' | ' | ' | ' | ' | |
Comprehensive income [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | |
Net income | 1,088 | ' | ' | ' | ' | 1,088 | ' | ' | |
Other comp. income | [1] | 16 | ' | ' | ' | ' | ' | ' | 16 |
Conversion, stock option exercises, forfeitures, and other | 40 | ' | ' | 1 | 23 | ' | 16 | ' | |
Conversion, stock option exercises, forfeitures, and other (shares) | ' | 300,000 | 500,000 | ' | ' | ' | ' | ' | |
Share repurchases (Note 16) | -683 | ' | ' | ' | ' | ' | -683 | ' | |
Share repurchases (Note 16) (Shares) | -3,820,000 | ' | -3,800,000 | ' | ' | ' | ' | ' | |
Cash dividends declared | -414 | ' | ' | ' | ' | -414 | ' | ' | |
Shareholders' equity, ending balance at Mar. 31, 2014 | $21,272 | ' | ' | $1,388 | $4,233 | $25,962 | ($9,577) | ($734) | |
Common shares, ending balance at Mar. 31, 2014 | 453,006,906 | 555,100,000 | -102,100,000 | ' | ' | ' | ' | ' | |
[1] | Net of deferred taxes of $5 million and $12 million during the three months ended March 31, 2014, and 2013, respectively. |
Condensed_Consolidated_Stateme7
Condensed Consolidated Statements of Changes in Common Shareholders' Equity (Unaudited) (Parentheticals) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Cash Dividends [Abstract] | ' | ' |
Cash dividends declared per share | $0.91 | $0.69 |
Basis_Of_Presentation
Basis Of Presentation | 3 Months Ended |
Mar. 31, 2014 | |
Basis of Presentation [Abstract] | ' |
Basis of Presentation [Text Block] | ' |
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). Our Consolidated Statement of Financial Position at December 31, 2013, is derived from audited financial statements. This Quarterly Report on Form 10-Q should be read in conjunction with our Consolidated Financial Statements and notes thereto contained in our 2013 Annual Report on Form 10-K. The results of operations for the three months ended March 31, 2014, are not necessarily indicative of the results for the entire year ending December 31, 2014. | |
The Condensed Consolidated Financial Statements are presented in accordance with GAAP as codified in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). Certain prior period amounts have been disaggregated to provide more detail and conform to the current period financial statement presentation. |
Operations_And_Segmentation
Operations And Segmentation | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Operations and Segmentation [Abstract] | ' | ||||
Operations and Segmentation [Text Block] | ' | ||||
2. 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 commodity group, we treat the financial results of the Railroad as one segment due to the integrated nature of our rail network. The following table provides freight revenue by commodity group: | |||||
Millions, | |||||
for the Three Months Ended March 31, | 2014 | 2013 | |||
Agricultural | $ | 910 | $ | 784 | |
Automotive | 488 | 487 | |||
Chemicals | 893 | 873 | |||
Coal | 961 | 936 | |||
Industrial Products | 1,011 | 916 | |||
Intermodal | 1,023 | 988 | |||
Total freight revenues | $ | 5,286 | $ | 4,984 | |
Other revenues | 352 | 306 | |||
Total operating revenues | $ | 5,638 | $ | 5,290 | |
Although our revenues are principally derived from customers domiciled in the U.S., the ultimate points of origination or destination for some products transported by us are outside the U.S. Each of our commodity groups includes revenue from shipments to and from Mexico. Included in the above table are revenues from our Mexico business which amounted to $540 million and $505 million, respectively for the three months ended March 31, 2014, and March 31, 2013. |
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Stock-Based Compensation [Abstract] | ' | ||||||
Stock-Based Compensation [Text Block] | ' | ||||||
3. 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: | |||||||
Millions, | |||||||
for the Three Months Ended March 31, | 2014 | 2013 | |||||
Stock-based compensation, before tax: | |||||||
Stock options | $ | 6 | $ | 4 | |||
Retention awards | 29 | 21 | |||||
Total stock-based compensation, before tax | $ | 35 | $ | 25 | |||
Excess tax benefits from equity compensation plans | $ | 60 | $ | 46 | |||
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 | 2014 | 2013 | |||||
Risk-free interest rate | 1.60% | 0.80% | |||||
Dividend yield | 2.10% | 2.10% | |||||
Expected life (years) | 5.2 | 5 | |||||
Volatility | 30.00% | 36.20% | |||||
Weighted-average grant-date fair value of options granted | $ | 40.35 | $ | 34.98 | |||
The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant; the 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 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 three months ended March 31, 2014, is presented below: | |||||||
Options (thous.) | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value (millions) | ||||
Outstanding at January 1, 2014 | 3,722 | $ | 80.14 | 5.8 yrs. | $ | 327 | |
Granted | 494 | 175.12 | N/A | N/A | |||
Exercised | -308 | 70.47 | N/A | N/A | |||
Forfeited or expired | -2 | 126.11 | N/A | N/A | |||
Outstanding at March 31, 2014 | 3,906 | $ | 92.89 | 6 | $ | 370 | |
Vested or expected to vest at March 31, 2014 | 3,874 | $ | 92.41 | 6 | $ | 369 | |
Options exercisable at March 31, 2014 | 2,842 | $ | 71.88 | 4.9 | $ | 329 | |
Stock options are granted at the closing price on the date of grant, have ten-year contractual terms, and vest no later than three years from the date of grant. None of the stock options outstanding at March 31, 2014, are subject to performance or market-based vesting conditions. | |||||||
At March 31, 2014, there was $29 million of unrecognized compensation expense related to nonvested stock options, which is expected to be recognized over a weighted-average period of 1.8 years. Additional information regarding stock option exercises appears in the table below: | |||||||
Millions, | |||||||
for the Three Months Ended March 31, | 2014 | 2013 | |||||
Intrinsic value of stock options exercised | $ | 34 | $ | 28 | |||
Cash received from option exercises | 18 | 14 | |||||
Treasury shares repurchased for employee payroll taxes | -7 | -5 | |||||
Tax benefit realized from option exercises | 13 | 11 | |||||
Aggregate grant-date fair value of stock options vested | 17 | 16 | |||||
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 three months ended March 31, 2014, were as follows: | |||||||
Shares (thous.) | Weighted-Average Grant-Date Fair Value | ||||||
Nonvested at January 1, 2014 | 1,856 | $ | 98.04 | ||||
Granted | 411 | 175.12 | |||||
Vested | -532 | 62.13 | |||||
Forfeited | -10 | 108.69 | |||||
Nonvested at March 31, 2014 | 1,725 | $ | 127.42 | ||||
Retention awards are granted at no cost to the employee or non-employee director and vest over periods lasting up to four years. At March 31, 2014, there was $124 million of total unrecognized compensation expense related to nonvested retention awards, which is expected to be recognized over a weighted-average period of 2.3 years. | |||||||
Performance Retention Awards – In February 2014, our Board of Directors approved performance stock unit grants. Other than different performance targets, the basic terms of these performance stock units are identical to those granted in February 2012, and February 2013, including using annual return on invested capital (ROIC) as the performance measure. We define ROIC as net operating profit adjusted for interest expense (including interest on the present value of operating leases) and taxes on interest divided by average invested capital adjusted for the present value of operating leases. | |||||||
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. 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. 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 2014, grant were as follows: | |||||||
2014 | |||||||
Dividend per share per quarter | $ | 0.91 | |||||
Risk-free interest rate at date of grant | 0.70% | ||||||
Changes in our performance retention awards during the three months ended March 31, 2014, were as follows: | |||||||
Shares (thous.) | Weighted-Average Grant-Date Fair Value | ||||||
Nonvested at January 1, 2014 | 944 | $ | 107.4 | ||||
Granted | 228 | 166.11 | |||||
Vested | -331 | 89.87 | |||||
Forfeited | -4 | 117.61 | |||||
Nonvested at March 31, 2014 | 837 | $ | 130.28 | ||||
At March 31, 2014, there was $62 million of total unrecognized compensation expense related to nonvested performance retention awards, which is expected to be recognized over a weighted-average period of 1.7 years. This expense is subject to achievement of the ROIC levels established for the performance stock unit grants. |
Retirement_Plans
Retirement Plans | 3 Months Ended | |||||||||
Mar. 31, 2014 | ||||||||||
Retirement Plans [Abstract] | ' | |||||||||
Retirement Plans [Text Block] | ' | |||||||||
4. 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. | ||||||||||
Other Postretirement Benefits (OPEB) – We provide medical and life insurance benefits for eligible retirees. 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 five-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 and OPEB cost/(benefit) were as follows for the three months ended March 31: | ||||||||||
Pension | OPEB | |||||||||
Millions | 2014 | 2013 | 2014 | 2013 | ||||||
Service cost | $ | 18 | $ | 19 | $ | 1 | $ | 1 | ||
Interest cost | 39 | 33 | 4 | 3 | ||||||
Expected return on plan assets | -58 | -51 | - | - | ||||||
Amortization of: | ||||||||||
Prior service credit | - | - | -3 | -4 | ||||||
Actuarial loss | 17 | 26 | 2 | 4 | ||||||
Net periodic pension cost | $ | 16 | $ | 27 | $ | 4 | $ | 4 | ||
Cash Contributions | ||||||||||
For the three months ended March 31, 2014, we have not made any cash contributions to the qualified pension plan. Any contributions made during 2014 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 March 31, 2014, we do not have minimum cash funding requirements for 2014. |
Other_Income
Other Income | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Other Income [Abstract] | ' | ||||||
Other Income [Text Block] | ' | ||||||
5. Other Income | |||||||
Other income included the following: | |||||||
Millions, | |||||||
for the Three Months Ended March 31, | 2014 | 2013 | |||||
Rental income [a] | $ | 24 | $ | 37 | |||
Net gain on non-operating asset dispositions | 4 | 4 | |||||
Interest income | 1 | 1 | |||||
Non-operating environmental costs and other [b] | 9 | -2 | |||||
Total | $ | 38 | $ | 40 | |||
[a] | 2013 includes $17 million related to a land lease contract settlement. | ||||||
[b] | 2014 includes $14 million related to the sale of a permanent easement. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2014 | |
Income Tax [Abstract] | ' |
Income Taxes [Text Block] | ' |
6. Income Taxes | |
Internal Revenue Service (IRS) examinations have been completed and settled for all years prior to 2005, and the statute of limitations bars any additional tax assessments. The IRS has completed their examinations and issued notices of deficiency for tax years 2005 through 2010. We disagree with many of their proposed adjustments, and we are at IRS Appeals for those years. Additionally, several state tax authorities are examining our state income tax returns for years 2006 through 2010. | |
In the fourth quarter of 2013, we reached an agreement in principle with the IRS to resolve all of the issues related to tax years 2005 through 2008, with the exception of interest calculations. We anticipate signing a closing agreement with the IRS for these years within the next 12 months. When signed, this closing agreement will not have a material effect on our consolidated results of operations, financial condition or liquidity. | |
At March 31, 2014, we had a net liability for unrecognized tax benefits of $61 million. Of that amount, $26 million is classified as a current liability in the Condensed Consolidated Statements of Financial Position. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
Earnings Per Share [Abstract] | ' | |||||
Earnings Per Share [Text Block] | ' | |||||
7. Earnings Per Share | ||||||
The following table provides a reconciliation between basic and diluted earnings per share: | ||||||
Millions, Except Per Share Amounts, | ||||||
for the Three Months Ended March 31, | 2014 | 2013 | ||||
Net income | $ | 1,088 | $ | 957 | ||
Weighted-average number of shares outstanding: | ||||||
Basic | 454.1 | 467.8 | ||||
Dilutive effect of stock options | 1.2 | 1.4 | ||||
Dilutive effect of retention shares and units | 0.9 | 1.3 | ||||
Diluted | 456.2 | 470.5 | ||||
Earnings per share – basic | $ | 2.4 | $ | 2.05 | ||
Earnings per share – diluted | $ | 2.38 | $ | 2.03 | ||
Stock options excluded as their inclusion would be anti-dilutive | 0.3 | 0.4 | ||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income/(Loss) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Accumulated Other Comprehensive Income/(Loss) [Abstract] | ' | ||||||||||||
Accumulated Other Comprehensive Income/(Loss) [Text Block] | ' | ||||||||||||
8. Accumulated Other Comprehensive Income/(Loss) | |||||||||||||
Reclassifications out of accumulated other comprehensive income/(loss) for the three months ended March 31, 2014, and 2013, were as follows (net of tax): | |||||||||||||
Millions | Defined benefit plans | Foreign currency translation | Derivatives | Total | |||||||||
Balance at January 1, 2014 | $ | -713 | $ | -37 | $ | - | $ | -750 | |||||
Other comprehensive income/(loss) before reclassifications | 10 | -4 | - | 6 | |||||||||
Amounts reclassified from accumulated other comprehensive income/(loss) [a] | 10 | - | - | 10 | |||||||||
Net year-to-date other comprehensive income/(loss), net of taxes of $5 million | 20 | -4 | - | 16 | |||||||||
Balance at March 31, 2014 | $ | -693 | $ | -41 | $ | - | $ | -734 | |||||
Balance at January 1, 2013 | $ | -1,149 | $ | -36 | $ | -1 | $ | -1,186 | |||||
Other comprehensive income/(loss) before reclassifications | -2 | 3 | - | 1 | |||||||||
Amounts reclassified from accumulated other comprehensive income/(loss) [a] | 16 | - | - | 16 | |||||||||
Net year-to-date other comprehensive income/(loss), net of taxes of $12 million | 14 | 3 | - | 17 | |||||||||
Balance at March 31, 2013 | $ | -1,135 | $ | -33 | $ | -1 | $ | -1,169 | |||||
[a] | The accumulated other comprehensive income/(loss) reclassification components are 1) prior service cost/(benefit) and 2) net actuarial loss which are both included in the computation of net periodic pension cost. See Note 4 Retirement Plans for additional details. | ||||||||||||
Accounts_Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2014 | |
Accounts Receivable [Abstract] | ' |
Accounts Receivable [Text Block] | ' |
9. Accounts Receivable | |
Accounts receivable includes freight and other receivables reduced by an allowance for doubtful accounts. The allowance is based upon historical losses, credit worthiness of customers, and current economic conditions. At both March 31, 2014, and December 31, 2013, our accounts receivable were reduced by $1 million. 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 March 31, 2014, and December 31, 2013, receivables classified as other assets were reduced by allowances of $21 million and $22 million, respectively. | |
Receivables Securitization Facility – The Railroad maintains a $600 million, 364-day receivables securitization facility under which it sells most of its eligible third-party receivables to Union Pacific Receivables, Inc. (UPRI), a 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. | |
No amount was outstanding under the facility at both March 31, 2014, and December 31, 2013. The facility was supported by $1.2 billion and $1.1 billion of accounts receivable as collateral at March 31, 2014, and December 31, 2013, 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 facility, with a maximum of $600 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 facility would not materially change. | |
The costs of the receivables securitization facility include interest, which will vary based on prevailing benchmark and commercial paper rates, program fees paid to participating banks, commercial paper issuing costs, and fees of participating banks for unused commitment availability. The costs of the receivables securitization facility are included in interest expense and were $1 million for the three months ended March 31, 2014, and 2013. | |
In July 2013, the $600 million receivables securitization facility was renewed for an additional 364-day period at comparable terms and conditions. |
Properties
Properties | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Properties [Abstract] | ' | ||||||||
Properties [Text Block] | ' | ||||||||
10. 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 March 31, 2014 | Cost | Depreciation | Value | Useful Life | |||||
Land | $ | 5,128 | $ | N/A | $ | 5,128 | N/A | ||
Road: | |||||||||
Rail and other track material | 14,053 | 5,048 | 9,005 | 33 | |||||
Ties | 8,881 | 2,357 | 6,524 | 33 | |||||
Ballast | 4,663 | 1,195 | 3,468 | 34 | |||||
Other roadway [a] | 15,737 | 2,784 | 12,953 | 48 | |||||
Total road | 43,334 | 11,384 | 31,950 | N/A | |||||
Equipment: | |||||||||
Locomotives | 7,724 | 3,544 | 4,180 | 20 | |||||
Freight cars | 2,079 | 990 | 1,089 | 25 | |||||
Work equipment and other | 559 | 126 | 433 | 18 | |||||
Total equipment | 10,362 | 4,660 | 5,702 | N/A | |||||
Technology and other | 797 | 286 | 511 | 11 | |||||
Construction in progress | 898 | - | 898 | N/A | |||||
Total | $ | 60,519 | $ | 16,330 | $ | 44,189 | N/A | ||
Millions, Except Estimated Useful Life | Accumulated | Net Book | Estimated | ||||||
As of December 31, 2013 | Cost | Depreciation | Value | Useful Life | |||||
Land | $ | 5,120 | $ | N/A | $ | 5,120 | N/A | ||
Road: | |||||||||
Rail and other track material | 13,861 | 4,970 | 8,891 | 35 | |||||
Ties | 8,785 | 2,310 | 6,475 | 33 | |||||
Ballast | 4,621 | 1,171 | 3,450 | 34 | |||||
Other roadway [a] | 15,596 | 2,726 | 12,870 | 48 | |||||
Total road | 42,863 | 11,177 | 31,686 | N/A | |||||
Equipment: | |||||||||
Locomotives | 7,518 | 3,481 | 4,037 | 20 | |||||
Freight cars | 2,085 | 1,000 | 1,085 | 25 | |||||
Work equipment and other | 561 | 119 | 442 | 18 | |||||
Total equipment | 10,164 | 4,600 | 5,564 | N/A | |||||
Technology and other | 711 | 286 | 425 | 10 | |||||
Construction in progress | 954 | - | 954 | N/A | |||||
Total | $ | 59,812 | $ | 16,063 | $ | 43,749 | N/A | ||
[a] | Other roadway includes grading, bridges and tunnels, signals, buildings, and other road assets. | ||||||||
Accounts_Payable_and_Other_Cur
Accounts Payable and Other Current Liabilities | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
Accounts Payable and Other Current Liabilties [Abstract] | ' | |||||
Accounts Payable and Other Current Liabilities [Text Block] | ' | |||||
11. Accounts Payable and Other Current Liabilities | ||||||
Mar. 31, | Dec. 31, | |||||
Millions | 2014 | 2013 | ||||
Accounts payable | $ | 888 | $ | 803 | ||
Income and other taxes payable | 877 | 491 | ||||
Dividends payable | 407 | 356 | ||||
Accrued wages and vacation | 395 | 385 | ||||
Accrued casualty costs | 204 | 207 | ||||
Interest payable | 130 | 169 | ||||
Equipment rents payable | 101 | 96 | ||||
Other | 554 | 579 | ||||
Total accounts payable and other current liabilities | $ | 3,556 | $ | 3,086 |
Financial_Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2014 | |
Financial Instruments[Abstract] | ' |
Financial Instruments [Text Block] | ' |
12. Financial Instruments | |
Strategy and Risk – We may use derivative financial instruments in limited instances for other than trading purposes to assist in managing our overall exposure to fluctuations in interest rates and fuel prices. We are not a party to leveraged derivatives and, by policy, do not use derivative financial instruments for speculative purposes. Derivative financial instruments qualifying for hedge accounting must maintain a specified level of effectiveness between the hedging instrument and the item being hedged, both at inception and throughout the hedged period. We formally document the nature and relationships between the hedging instruments and hedged items at inception, as well as our risk-management objectives, strategies for undertaking the various hedge transactions, and method of assessing hedge effectiveness. Changes in the fair market value of derivative financial instruments that do not qualify for hedge accounting are charged to earnings. We may use swaps, collars, futures, and/or forward contracts to mitigate the risk of adverse movements in interest rates and fuel prices; however, the use of these derivative financial instruments may limit future benefits from favorable interest rate and fuel price movements. | |
Interest Rate Cash Flow Hedges – We report changes in the fair value of cash flow hedges in accumulated other comprehensive loss until the hedged item affects earnings. At both March 31, 2014, and December 31, 2013, we had reductions of $1 million recorded as an accumulated other comprehensive loss that is being amortized on a straight-line basis through September 30, 2014, for a cash flow hedge that was settled in 2004. As of March 31, 2014, and December 31, 2013, we had no interest rate cash flow hedges outstanding. | |
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 March 31, 2014, the fair value of total debt was $11.1 billion, approximately $0.9 billion more than the carrying value. At December 31, 2013, the fair value of total debt was $10.2 billion, approximately $0.6 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. It does not impact the financial statements under current accounting rules. At both March 31, 2014, and December 31, 2013, approximately $163 million of debt securities contained call provisions that allow us to retire the debt instruments prior to final maturity, with the payment of fixed call premiums, or in certain cases, at par. The fair value of our cash equivalents approximates their carrying value due to the short-term maturities of these instruments. |
Debt
Debt | 3 Months Ended | |
Mar. 31, 2014 | ||
Debt [Abstract] | ' | |
Debt [Text Block] | ' | |
13. Debt | ||
Credit Facilities – At March 31, 2014, we had $1.8 billion of credit available under our revolving credit facility (the facility), which is designated for general corporate purposes and supports the issuance of commercial paper. We did not draw on the facility at any time during the three months ended March 31, 2014. 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 facility matures in 2015 under a four-year term and requires the Corporation to maintain a debt-to-net-worth coverage ratio as a condition to making a borrowing. At March 31, 2014, and December 31, 2013 (and at all times during the first quarter), we were in compliance with this covenant. | ||
The definition of debt used for purposes of calculating the debt-to-net-worth coverage ratio includes, among other things, certain credit arrangements, capital leases, guarantees and unfunded and vested pension benefits under Title IV of ERISA. At March 31, 2014, the debt-to-net-worth coverage ratio allowed us to carry up to $43 billion of debt (as defined in the facility), and we had $10.5 billion of debt (as defined in the facility) outstanding at that date. Under our current capital plans, we expect to continue to satisfy the debt-to-net-worth coverage ratio; however, many factors beyond our reasonable control could affect our ability to comply with this provision in the future. 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 $75 million cross-default provision and a change-of-control provision. | ||
During the three months ended March 31, 2014, we did not issue or repay any commercial paper, and at March 31, 2014, we had no commercial paper outstanding. Our revolving credit facility supports 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. | ||
Shelf Registration Statement and Significant New Borrowings – Under our current 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. We have no immediate plans to issue equity securities; however, we will continue to explore opportunities to replace existing debt or access capital through issuances of debt securities under our shelf registration, and, therefore, we may issue additional debt securities at any time. | ||
During the three months ended March 31, 2014, we issued the following unsecured, fixed-rate debt securities under our current shelf registration: | ||
Date | Description of Securities | |
10-Jan-14 | $300 million of 2.25% Notes due February 15, 2019 | |
$400 million of 3.75% Notes due March 15, 2024 | ||
$300 million of 4.85% Notes due June 15, 2044 | ||
We used the net proceeds from this offering for general corporate purposes, including the repurchase of common stock pursuant to our share repurchase program. These debt securities include change-of-control provisions. At March 31, 2014, we had remaining authority to issue up to $1.85 billion of debt securities under our shelf registration. | ||
Receivables Securitization Facility – As of March 31, 2014, and December 31, 2013, no amount was outstanding under our receivables securitization facility. See further discussion of our receivables securitization facility in Note 9. |
Variable_Interest_Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2014 | |
Variable Interest Entities [Abstract] | ' |
Variable Interest Entities [Text Block] | ' |
14. 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, including our headquarters building) 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 price options are not considered to be potentially significant to the VIEs. The future minimum lease payments associated with the VIE leases totaled $3.2 billion as of March 31, 2014. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Commitments And Contingencies [Abstract] | ' | ||||
Commitments and Contingencies [Text Block] | ' | ||||
15. 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; however, to the extent possible, where asserted and unasserted claims are considered probable and where such claims can be reasonably estimated, we have recorded a liability. 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 92% of the recorded liability is related to asserted claims and approximately 8% is related to unasserted claims at March 31, 2014. 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 $294 million to $322 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 Three Months Ended March 31, | 2014 | 2013 | |||
Beginning balance | $ | 294 | $ | 334 | |
Current year accruals | 23 | 27 | |||
Changes in estimates for prior years | -6 | -8 | |||
Payments | -17 | -18 | |||
Ending balance at March 31 | $ | 294 | $ | 335 | |
Current portion, ending balance at March 31 | $ | 78 | $ | 97 | |
Asbestos – We are a defendant in a number of lawsuits in which current and former employees and other parties allege exposure to asbestos. We assess our potential liability using a statistical analysis of resolution costs for asbestos-related claims. This liability is updated annually and excludes future defense and processing costs. The liability for resolving both asserted and unasserted claims was based on the following assumptions: | |||||
The ratio of future claims by alleged disease would be consistent with historical averages adjusted for inflation. | |||||
The number of claims filed against us will decline each year. | |||||
The average settlement values for asserted and unasserted claims will be equivalent to historical averages. | |||||
The percentage of claims dismissed in the future will be equivalent to historical averages. | |||||
Our liability for asbestos-related claims is not discounted to present value due to the uncertainty surrounding the timing of future payments. Approximately 20% of the recorded liability related to asserted claims and approximately 80% related to unasserted claims at March 31, 2014. | |||||
Our asbestos-related liability activity was as follows: | |||||
Millions, | |||||
for the Three Months Ended March 31, | 2014 | 2013 | |||
Beginning balance | $ | 131 | $ | 139 | |
Accruals | - | - | |||
Payments | -2 | -3 | |||
Ending balance at March 31 | $ | 129 | $ | 136 | |
Current portion, ending balance at March 31 | $ | 9 | $ | 9 | |
We have insurance coverage for a portion of the costs incurred to resolve asbestos-related claims, and we have recognized an asset for estimated insurance recoveries at March 31, 2014, and December 31, 2013. | |||||
We believe that our estimates of liability for asbestos-related claims and insurance recoveries are reasonable and probable. The amounts recorded for asbestos-related liabilities and related insurance recoveries were based on currently known facts. However, future events, such as the number of new claims filed each year, average settlement costs, and insurance coverage issues, could cause the actual costs and insurance recoveries to be higher or lower than the projected amounts. Estimates also may vary in the future if strategies, activities, and outcomes of asbestos litigation materially change; federal and state laws governing asbestos litigation increase or decrease the probability or amount of compensation of claimants; and there are material changes with respect to payments made to claimants by other defendants. | |||||
Environmental Costs – We are subject to federal, state, and local environmental laws and regulations. We have identified 269 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, 17 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. We do not discount our environmental liabilities when the timing of the anticipated cash payments is not fixed or readily determinable. At both March 31, 2014, and December 31, 2013, none of our environmental liability was discounted. | |||||
Our environmental liability activity was as follows: | |||||
Millions, | |||||
for the Three Months Ended March 31, | 2014 | 2013 | |||
Beginning balance | $ | 171 | $ | 170 | |
Accruals | 6 | 7 | |||
Payments | -11 | -11 | |||
Ending balance at March 31 | $ | 166 | $ | 166 | |
Current portion, ending balance at March 31 | $ | 52 | $ | 50 | |
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. In the event the Company leaves the reinsurance program, the Company is not relieved of its primary obligation to the policyholders for activity prior to the termination of the treaty agreements. We record both liabilities and reinsurance receivables using an actuarial analysis based on historical experience in our Condensed Consolidated Statements of Financial Position. | |||||
Guarantees – At both March 31, 2014, and December 31, 2013, we were contingently liable for guarantees of $299 million. We have recorded a liability of $1 million for the fair value of these obligations as of both March 31, 2014, and December 31, 2013. We entered into these contingent guarantees in the normal course of business, and they include guaranteed obligations related to our headquarters building, equipment financings, and 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 – Our maximum potential exposure under indemnification arrangements, including certain tax indemnifications, can range from a specified dollar amount to an unlimited amount, 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. | |||||
Operating Leases – At March 31, 2014, we had commitments for future minimum lease payments under operating leases with initial or remaining non-cancelable lease terms in excess of one year of approximately $4 billion. | |||||
Gain Contingency – UPRR and Santa Fe Pacific Pipelines (SFPP, a subsidiary of Kinder Morgan Energy Partners, L.P.) currently are engaged in a proceeding to resolve the fair market rent payable to UPRR under a 10-year agreement commencing on January 1, 2004, for pipeline easements on UPRR rights-of-way (Union Pacific Railroad Company vs. Santa Fe Pacific Pipelines, Inc., SFPP, L.P., Kinder Morgan Operating L.P. “D” Kinder Morgan G.P., Inc., et al., Superior Court of the State of California for the County of Los Angeles, filed July 28, 2004). In February 2007, a trial began to resolve this issue, and, on September 28, 2011, the judge issued a tentative Statement of Decision, which concluded that SFPP owes back rent to UPRR for the years 2004 through 2011. On May 29, 2012, the court entered judgment, awarding UPRR back rent and prejudgment interest. SFPP is appealing the final judgment. A favorable final judgment may materially affect our results of operations in the period of any monetary recoveries; however, due to the uncertainty regarding the amount and timing of any recovery, including the outcome of SFPP's appeal of this judgment or any subsequent proceeding, we consider this a gain contingency and do not reflect any amounts in the Condensed Consolidated Financial Statements as of March 31, 2014. |
Share_Repurchase_Program
Share Repurchase Program | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Share Repurchase Program [Abstract] | ' | |||||||
Share Repurchase Program [Text Block] | ' | |||||||
16. Share Repurchase Program | ||||||||
Effective January 1, 2014, our Board of Directors authorized the repurchase of up to 60 million shares of our common stock by December 31, 2017, replacing our previous repurchase program. As of March 31, 2014, we repurchased a total of $10.0 billion of our common stock since the commencement of our repurchase programs in 2007. The table below represents shares repurchased in the first quarter of 2013 under our previous repurchase program, and shares repurchased in the first quarter of 2014 under the new program. | ||||||||
Number of Shares Purchased | Average Price Paid | |||||||
2014 | 2013 | 2014 | 2013 | |||||
First quarter | 3,820,000 | 2,881,400 | $ | 178.85 | $ | 136.58 | ||
Remaining number of shares that may be repurchased under current authority | 56,180,000 | |||||||
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. Repurchased shares are recorded in treasury stock at cost, which includes any applicable commissions and fees. |
Operations_And_Segmentation_Ta
Operations And Segmentation (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Operations and Segmentation [Abstract] | ' | ||||
Freight Revenue By Commodity Group [Table Text Block] | ' | ||||
The following table provides freight revenue by commodity group: | |||||
Millions, | |||||
for the Three Months Ended March 31, | 2014 | 2013 | |||
Agricultural | $ | 910 | $ | 784 | |
Automotive | 488 | 487 | |||
Chemicals | 893 | 873 | |||
Coal | 961 | 936 | |||
Industrial Products | 1,011 | 916 | |||
Intermodal | 1,023 | 988 | |||
Total freight revenues | $ | 5,286 | $ | 4,984 | |
Other revenues | 352 | 306 | |||
Total operating revenues | $ | 5,638 | $ | 5,290 |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Stock-Based Compensation [Abstract] | ' | ||||||
Stock-Based Compensation [Table Text Block] | ' | ||||||
Information regarding stock-based compensation appears in the table below: | |||||||
Millions, | |||||||
for the Three Months Ended March 31, | 2014 | 2013 | |||||
Stock-based compensation, before tax: | |||||||
Stock options | $ | 6 | $ | 4 | |||
Retention awards | 29 | 21 | |||||
Total stock-based compensation, before tax | $ | 35 | $ | 25 | |||
Excess tax benefits from equity compensation plans | $ | 60 | $ | 46 | |||
Stock Options Weight Average Assumptions [Table Text Block] | ' | ||||||
The table below shows the annual weighted-average assumptions used for valuation purposes: | |||||||
Weighted-Average Assumptions | 2014 | 2013 | |||||
Risk-free interest rate | 1.60% | 0.80% | |||||
Dividend yield | 2.10% | 2.10% | |||||
Expected life (years) | 5.2 | 5 | |||||
Volatility | 30.00% | 36.20% | |||||
Weighted-average grant-date fair value of options granted | $ | 40.35 | $ | 34.98 | |||
Stock Options Activity [Table Text Block] | ' | ||||||
A summary of stock option activity during the three months ended March 31, 2014, is presented below: | |||||||
Options (thous.) | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value (millions) | ||||
Outstanding at January 1, 2014 | 3,722 | $ | 80.14 | 5.8 yrs. | $ | 327 | |
Granted | 494 | 175.12 | N/A | N/A | |||
Exercised | -308 | 70.47 | N/A | N/A | |||
Forfeited or expired | -2 | 126.11 | N/A | N/A | |||
Outstanding at March 31, 2014 | 3,906 | $ | 92.89 | 6 | $ | 370 | |
Vested or expected to vest at March 31, 2014 | 3,874 | $ | 92.41 | 6 | $ | 369 | |
Options exercisable at March 31, 2014 | 2,842 | $ | 71.88 | 4.9 | $ | 329 | |
Stock Option Exercises [Table Text Block] | ' | ||||||
Additional information regarding stock option exercises appears in the table below: | |||||||
Millions, | |||||||
for the Three Months Ended March 31, | 2014 | 2013 | |||||
Intrinsic value of stock options exercised | $ | 34 | $ | 28 | |||
Cash received from option exercises | 18 | 14 | |||||
Treasury shares repurchased for employee payroll taxes | -7 | -5 | |||||
Tax benefit realized from option exercises | 13 | 11 | |||||
Aggregate grant-date fair value of stock options vested | 17 | 16 | |||||
Retention Awards Activity [Table Text Block] | ' | ||||||
Changes in our retention awards during the three months ended March 31, 2014, were as follows: | |||||||
Shares (thous.) | Weighted-Average Grant-Date Fair Value | ||||||
Nonvested at January 1, 2014 | 1,856 | $ | 98.04 | ||||
Granted | 411 | 175.12 | |||||
Vested | -532 | 62.13 | |||||
Forfeited | -10 | 108.69 | |||||
Nonvested at March 31, 2014 | 1,725 | $ | 127.42 | ||||
Performance Retention Awards Present Value Calculation Assumptions [Table Text Block] | ' | ||||||
The assumptions used to calculate the present value of estimated future dividends related to the February 2014, grant were as follows: | |||||||
2014 | |||||||
Dividend per share per quarter | $ | 0.91 | |||||
Risk-free interest rate at date of grant | 0.70% | ||||||
Performance Based Units Activity [Table Text Block] | ' | ||||||
Changes in our performance retention awards during the three months ended March 31, 2014, were as follows: | |||||||
Shares (thous.) | Weighted-Average Grant-Date Fair Value | ||||||
Nonvested at January 1, 2014 | 944 | $ | 107.4 | ||||
Granted | 228 | 166.11 | |||||
Vested | -331 | 89.87 | |||||
Forfeited | -4 | 117.61 | |||||
Nonvested at March 31, 2014 | 837 | $ | 130.28 |
Retirement_Plans_Tables
Retirement Plans (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2014 | ||||||||||
Retirement Plans [Abstract] | ' | |||||||||
Net Periodic Pension And OPEB Cost [Table Text Block] | ' | |||||||||
The components of our net periodic pension and OPEB cost/(benefit) were as follows for the three months ended March 31: | ||||||||||
Pension | OPEB | |||||||||
Millions | 2014 | 2013 | 2014 | 2013 | ||||||
Service cost | $ | 18 | $ | 19 | $ | 1 | $ | 1 | ||
Interest cost | 39 | 33 | 4 | 3 | ||||||
Expected return on plan assets | -58 | -51 | - | - | ||||||
Amortization of: | ||||||||||
Prior service credit | - | - | -3 | -4 | ||||||
Actuarial loss | 17 | 26 | 2 | 4 | ||||||
Net periodic pension cost | $ | 16 | $ | 27 | $ | 4 | $ | 4 |
Other_Income_Tables
Other Income (Tables) | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Other Income [Abstract] | ' | ||||||
Other Income [Table Text Block] | ' | ||||||
Other income included the following: | |||||||
Millions, | |||||||
for the Three Months Ended March 31, | 2014 | 2013 | |||||
Rental income [a] | $ | 24 | $ | 37 | |||
Net gain on non-operating asset dispositions | 4 | 4 | |||||
Interest income | 1 | 1 | |||||
Non-operating environmental costs and other [b] | 9 | -2 | |||||
Total | $ | 38 | $ | 40 | |||
[a] | 2013 includes $17 million related to a land lease contract settlement. | ||||||
[b] | 2014 includes $14 million related to the sale of a permanent easement. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
Earnings Per Share [Abstract] | ' | |||||
Earnings Per Share [Table Text Block] | ' | |||||
The following table provides a reconciliation between basic and diluted earnings per share: | ||||||
Millions, Except Per Share Amounts, | ||||||
for the Three Months Ended March 31, | 2014 | 2013 | ||||
Net income | $ | 1,088 | $ | 957 | ||
Weighted-average number of shares outstanding: | ||||||
Basic | 454.1 | 467.8 | ||||
Dilutive effect of stock options | 1.2 | 1.4 | ||||
Dilutive effect of retention shares and units | 0.9 | 1.3 | ||||
Diluted | 456.2 | 470.5 | ||||
Earnings per share – basic | $ | 2.4 | $ | 2.05 | ||
Earnings per share – diluted | $ | 2.38 | $ | 2.03 | ||
Stock options excluded as their inclusion would be anti-dilutive | 0.3 | 0.4 | ||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income/(Loss) (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Accumulated Other Comprehensive Income/(Loss) [Abstract] | ' | ||||||||||||
Accumulated Other Comprehensive Income/(Loss) [Table Text Block] | ' | ||||||||||||
Reclassifications out of accumulated other comprehensive income/(loss) for the three months ended March 31, 2014, and 2013, were as follows (net of tax): | |||||||||||||
Millions | Defined benefit plans | Foreign currency translation | Derivatives | Total | |||||||||
Balance at January 1, 2014 | $ | -713 | $ | -37 | $ | - | $ | -750 | |||||
Other comprehensive income/(loss) before reclassifications | 10 | -4 | - | 6 | |||||||||
Amounts reclassified from accumulated other comprehensive income/(loss) [a] | 10 | - | - | 10 | |||||||||
Net year-to-date other comprehensive income/(loss), net of taxes of $5 million | 20 | -4 | - | 16 | |||||||||
Balance at March 31, 2014 | $ | -693 | $ | -41 | $ | - | $ | -734 | |||||
Balance at January 1, 2013 | $ | -1,149 | $ | -36 | $ | -1 | $ | -1,186 | |||||
Other comprehensive income/(loss) before reclassifications | -2 | 3 | - | 1 | |||||||||
Amounts reclassified from accumulated other comprehensive income/(loss) [a] | 16 | - | - | 16 | |||||||||
Net year-to-date other comprehensive income/(loss), net of taxes of $12 million | 14 | 3 | - | 17 | |||||||||
Balance at March 31, 2013 | $ | -1,135 | $ | -33 | $ | -1 | $ | -1,169 | |||||
[a] | The accumulated other comprehensive income/(loss) reclassification components are 1) prior service cost/(benefit) and 2) net actuarial loss which are both included in the computation of net periodic pension cost. See Note 4 Retirement Plans for additional details. | ||||||||||||
Properties_Tables
Properties (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Properties [Abstract] | ' | ||||||||
Properties [Table Text Block] | ' | ||||||||
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 March 31, 2014 | Cost | Depreciation | Value | Useful Life | |||||
Land | $ | 5,128 | $ | N/A | $ | 5,128 | N/A | ||
Road: | |||||||||
Rail and other track material | 14,053 | 5,048 | 9,005 | 33 | |||||
Ties | 8,881 | 2,357 | 6,524 | 33 | |||||
Ballast | 4,663 | 1,195 | 3,468 | 34 | |||||
Other roadway [a] | 15,737 | 2,784 | 12,953 | 48 | |||||
Total road | 43,334 | 11,384 | 31,950 | N/A | |||||
Equipment: | |||||||||
Locomotives | 7,724 | 3,544 | 4,180 | 20 | |||||
Freight cars | 2,079 | 990 | 1,089 | 25 | |||||
Work equipment and other | 559 | 126 | 433 | 18 | |||||
Total equipment | 10,362 | 4,660 | 5,702 | N/A | |||||
Technology and other | 797 | 286 | 511 | 11 | |||||
Construction in progress | 898 | - | 898 | N/A | |||||
Total | $ | 60,519 | $ | 16,330 | $ | 44,189 | N/A | ||
Millions, Except Estimated Useful Life | Accumulated | Net Book | Estimated | ||||||
As of December 31, 2013 | Cost | Depreciation | Value | Useful Life | |||||
Land | $ | 5,120 | $ | N/A | $ | 5,120 | N/A | ||
Road: | |||||||||
Rail and other track material | 13,861 | 4,970 | 8,891 | 35 | |||||
Ties | 8,785 | 2,310 | 6,475 | 33 | |||||
Ballast | 4,621 | 1,171 | 3,450 | 34 | |||||
Other roadway [a] | 15,596 | 2,726 | 12,870 | 48 | |||||
Total road | 42,863 | 11,177 | 31,686 | N/A | |||||
Equipment: | |||||||||
Locomotives | 7,518 | 3,481 | 4,037 | 20 | |||||
Freight cars | 2,085 | 1,000 | 1,085 | 25 | |||||
Work equipment and other | 561 | 119 | 442 | 18 | |||||
Total equipment | 10,164 | 4,600 | 5,564 | N/A | |||||
Technology and other | 711 | 286 | 425 | 10 | |||||
Construction in progress | 954 | - | 954 | N/A | |||||
Total | $ | 59,812 | $ | 16,063 | $ | 43,749 | N/A | ||
[a] | Other roadway includes grading, bridges and tunnels, signals, buildings, and other road assets. | ||||||||
Recovered_Sheet1
Accounts Payable And Other Current Liabilities (Tables) | 3 Months Ended | |||||
Mar. 31, 2014 | ||||||
Accounts Payable and Other Current Liabilties [Abstract] | ' | |||||
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | ' | |||||
Accounts Payable and Other Current Liabilities | ||||||
Mar. 31, | Dec. 31, | |||||
Millions | 2014 | 2013 | ||||
Accounts payable | $ | 888 | $ | 803 | ||
Income and other taxes payable | 877 | 491 | ||||
Dividends payable | 407 | 356 | ||||
Accrued wages and vacation | 395 | 385 | ||||
Accrued casualty costs | 204 | 207 | ||||
Interest payable | 130 | 169 | ||||
Equipment rents payable | 101 | 96 | ||||
Other | 554 | 579 | ||||
Total accounts payable and other current liabilities | $ | 3,556 | $ | 3,086 |
Debt_Tables
Debt (Tables) | 3 Months Ended | |
Mar. 31, 2014 | ||
Debt [Abstract] | ' | |
Unsecured Fixed Rate Debt Securities Issued Under Current Shelf Registration [Table Text Block] | ' | |
During the three months ended March 31, 2014, we issued the following unsecured, fixed-rate debt securities under our current shelf registration: | ||
Date | Description of Securities | |
10-Jan-14 | $300 million of 2.25% Notes due February 15, 2019 | |
$400 million of 3.75% Notes due March 15, 2024 | ||
$300 million of 4.85% Notes due June 15, 2044 |
Commitments_And_Contingencies_
Commitments And Contingencies (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Commitments And Contingencies Tables [Abstract] | ' | ||||
Commitments And Contingencies Activity [Table Text Block] | ' | ||||
Our personal injury liability activity was as follows: | |||||
Millions, | |||||
for the Three Months Ended March 31, | 2014 | 2013 | |||
Beginning balance | $ | 294 | $ | 334 | |
Current year accruals | 23 | 27 | |||
Changes in estimates for prior years | -6 | -8 | |||
Payments | -17 | -18 | |||
Ending balance at March 31 | $ | 294 | $ | 335 | |
Current portion, ending balance at March 31 | $ | 78 | $ | 97 | |
Our asbestos-related liability activity was as follows: | |||||
Millions, | |||||
for the Three Months Ended March 31, | 2014 | 2013 | |||
Beginning balance | $ | 131 | $ | 139 | |
Accruals | - | - | |||
Payments | -2 | -3 | |||
Ending balance at March 31 | $ | 129 | $ | 136 | |
Current portion, ending balance at March 31 | $ | 9 | $ | 9 | |
Our environmental liability activity was as follows: | |||||
Millions, | |||||
for the Three Months Ended March 31, | 2014 | 2013 | |||
Beginning balance | $ | 171 | $ | 170 | |
Accruals | 6 | 7 | |||
Payments | -11 | -11 | |||
Ending balance at March 31 | $ | 166 | $ | 166 | |
Current portion, ending balance at March 31 | $ | 52 | $ | 50 |
Share_Repurchase_Program_Table
Share Repurchase Program (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Share Repurchase Program [Abstract] | ' | |||||||
Share Repurchase Program [Table Text Block] | ' | |||||||
The table below represents shares repurchased in the first quarter of 2013 under our previous repurchase program, and shares repurchased in the first quarter of 2014 under the new program. | ||||||||
Number of Shares Purchased | Average Price Paid | |||||||
2014 | 2013 | 2014 | 2013 | |||||
First quarter | 3,820,000 | 2,881,400 | $ | 178.85 | $ | 136.58 | ||
Remaining number of shares that may be repurchased under current authority | 56,180,000 | |||||||
Operations_And_Segmentation_De
Operations And Segmentation (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Commodity Group Information [Line Items] | ' | ' |
Freight revenues | $5,286 | $4,984 |
Other revenues | 352 | 306 |
Total operating revenues | 5,638 | 5,290 |
Freight revenues - Mexico | 540 | 505 |
Agriculture [Member] | ' | ' |
Commodity Group Information [Line Items] | ' | ' |
Freight revenues | 910 | 784 |
Automotive [Member] | ' | ' |
Commodity Group Information [Line Items] | ' | ' |
Freight revenues | 488 | 487 |
Chemicals [Member] | ' | ' |
Commodity Group Information [Line Items] | ' | ' |
Freight revenues | 893 | 873 |
Coal [Member] | ' | ' |
Commodity Group Information [Line Items] | ' | ' |
Freight revenues | 961 | 936 |
Industrial Products [Member] | ' | ' |
Commodity Group Information [Line Items] | ' | ' |
Freight revenues | 1,011 | 916 |
Intermodal [Member] | ' | ' |
Commodity Group Information [Line Items] | ' | ' |
Freight revenues | $1,023 | $988 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details 1) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Stock-Based Compensation, Before Tax: [Abstract] | ' | ' |
Stock options | $6 | $4 |
Retention awards | 29 | 21 |
Total stock-based compensation, before tax | 35 | 25 |
Excess tax benefits from equity compensation plans | $60 | $46 |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details 2) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Stock Options [Member] | ' | ' |
Assumptions For Stock Awards [Abstract] | ' | ' |
Risk-free interest rate | 1.60% | 0.80% |
Dividend yield | 2.10% | 2.10% |
Expected life (years) | '5 years 2 months | '5 years |
Volatility | 30.00% | 36.20% |
Weighted-average grant-date fair value of options granted | $40.35 | $34.98 |
Performance Retention Awards [Member] | ' | ' |
Assumptions For Stock Awards [Abstract] | ' | ' |
Dividend per share per quarter | $0.91 | ' |
Risk-free interest rate | 0.70% | ' |
Continued employment requirement | '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. | ' |
StockBased_CompensationDetails
Stock-Based Compensation(Details 3) (USD $) | 3 Months Ended |
In Millions, except Share data in Thousands, unless otherwise specified | Mar. 31, 2014 |
Stock Options [Member] | ' |
Stock Option Activity [Abstract] | ' |
Stock options, shares outstanding at January 1, 2014 | 3,722 |
Stock options, shares granted | 494 |
Stock options, shares exercised | -308 |
Stock options, shares forfeited or expired | -2 |
Stock options, shares outstanding at March 31, 2014 | 3,906 |
Stock options, shares vested or expected to vest at March 31, 2014 | 3,874 |
Stock options, shares exercisable at March 31, 2014 | 2,842 |
Stock options weighted-average exercise price, outstanding at January 1, 2014 | $80.14 |
Stock options weighted-average exercise price, granted | $175.12 |
Stock options weighted-average exercise price, exercised | $70.47 |
Stock options weighted-average exercise price, forfeited or expired | $126.11 |
Stock options weighted-average exercise price, outstanding at March 31, 2014 | $92.89 |
Stock options weighted-average exercise price, vested or expected to vest at March 31, 2014 | $92.41 |
Stock options weighted-average exercise price, options exercisable at March 31, 2014 | $71.88 |
Stock options weighted-average remaining contractual term in years, outstanding at January 1, 2014 | '5 years 10 months |
Stock options weighted-average remaining contractual term in years, outstanding at March 31, 2014 | '6 years |
Stock options weighted-average remaining contractual term in years, vested or expected to vest at March 31, 2014 | '6 years |
Stock options weighted-average remaining contractual term in years, options exercisable at March 31, 2014 | '4 years 11 months |
Stock options aggregate intrinsic value, outstanding at January 1, 2014 | $327 |
Stock options aggregate intrinsic value, outstanding at March 31, 2014 | 370 |
Stock options aggregate intrinsic value, vested or expected to vest at March 31, 2014 | 369 |
Stock options aggregate intrinsic value, options exercisable at March 31, 2014 | 329 |
Contractual Term | 'Stock options are granted at the closing price on the date of grant, have ten-year contractual terms |
Stock options, years until vest | '3 years |
Stock options, subject to performance or market-based vesting conditions | 'None |
Unrecognized Compensation Expense [Abstract] | ' |
Unrecognized compensation expense | 29 |
Expected weighted-average period (in years) of nonvested stock options to be recognized | '1 year 10 months |
Retention Awards [Member] | ' |
Awards Activity [Abstract] | ' |
Awards, shares nonvested at January 1, 2014 | 1,856 |
Awards, shares granted | 411 |
Awards, shares vested | -532 |
Awards, shares forfeited | -10 |
Awards, shares nonvested at March 31, 2014 | 1,725 |
Awards weighted-average grant-date fair value, nonvested at January 1, 2014 | $98.04 |
Awards weighted-average grant-date fair value, granted | $175.12 |
Awards weighted-average grant-date fair value, vested | $62.13 |
Awards weighted-average grant-date fair value, forfeited | $108.69 |
Awards weighted-average grant-date fair value, nonvested at March 31, 2014 | $127.42 |
Unrecognized Compensation Expense [Abstract] | ' |
Unrecognized compensation expense | 124 |
Expected weighted-average period (in years) of nonvested stock options to be recognized | '2 years 4 months |
Performance Retention Awards [Member] | ' |
Awards Activity [Abstract] | ' |
Awards, shares nonvested at January 1, 2014 | 944 |
Awards, shares granted | 228 |
Awards, shares vested | -331 |
Awards, shares forfeited | -4 |
Awards, shares nonvested at March 31, 2014 | 837 |
Awards weighted-average grant-date fair value, nonvested at January 1, 2014 | $107.40 |
Awards weighted-average grant-date fair value, granted | $166.11 |
Awards weighted-average grant-date fair value, vested | $89.87 |
Awards weighted-average grant-date fair value, forfeited | $117.61 |
Awards weighted-average grant-date fair value, nonvested at March 31, 2014 | $130.28 |
Unrecognized Compensation Expense [Abstract] | ' |
Unrecognized compensation expense | $62 |
Expected weighted-average period (in years) of nonvested stock options to be recognized | '1 year 8 months |
StockBased_Compensation_Detail2
Stock-Based Compensation (Details 4) (Stock Options [Member], USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Stock Options [Member] | ' | ' |
Stock Option Aggregate Disclosures [Abstract] | ' | ' |
Intrinsic value of stock options exercised | $34 | $28 |
Cash received from option exercises | 18 | 14 |
Treasury shares repurchased for employee payroll taxes | -7 | -5 |
Tax benefit realized from option exercises | 13 | 11 |
Aggregate grant-date fair value of stock options vested | $17 | $16 |
Retirement_Plans_Details
Retirement Plans (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Pension [Member] | ' | ' |
Net Periodic Pension And OPEB Cost [Line Items] | ' | ' |
Service cost | $18 | $19 |
Interest cost | 39 | 33 |
Expected return on plan assets | -58 | -51 |
Amortization of prior service credit | 0 | 0 |
Amortization of actuarial loss | 17 | 26 |
Net periodic pension/OPEB cost | 16 | 27 |
Cash contributions to qualified pension plan | 0 | ' |
OPEB [Member] | ' | ' |
Net Periodic Pension And OPEB Cost [Line Items] | ' | ' |
Service cost | 1 | 1 |
Interest cost | 4 | 3 |
Expected return on plan assets | 0 | 0 |
Amortization of prior service credit | -3 | -4 |
Amortization of actuarial loss | 2 | 4 |
Net periodic pension/OPEB cost | $4 | $4 |
Other_Income_Details
Other Income (Details) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Other Income Details [Abstract] | ' | ' | ||
Rental income | $24 | $37 | [1] | |
Net gain on non-operating asset dispositions | 4 | 4 | ||
Interest Income | 1 | 1 | ||
Non-operating environmental costs and other | 9 | [2] | -2 | |
Total | 38 | 40 | ||
Land lease contract settlement | ' | 17 | ||
Permanent easement sale | $14 | ' | ||
[1] | 2013 includes $17 million related to a land lease contract settlement. | |||
[2] | 2014 includes $14 million related to the sale of a permanent easement. |
Income_Taxes_Details
Income Taxes (Details) (USD $) | Mar. 31, 2014 |
In Millions, unless otherwise specified | |
Current Unrecognized Tax Benefits [Abstract] | ' |
Net unrecognized tax benefit liability | $61 |
Current liability for unrecognized tax benefits | $26 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Earnings Per Share Details [Abstract] | ' | ' |
Net income | $1,088 | $957 |
Weighted-Average Number Of Shares Outstanding [Abstract] | ' | ' |
Basic | 454.1 | 467.8 |
Dilutive effect of stock options | 1.2 | 1.4 |
Dilutive effect of retention shares and units | 0.9 | 1.3 |
Diluted | 456.2 | 470.5 |
Earnings per share - basic | $2.40 | $2.05 |
Earnings per share - diluted | $2.38 | $2.03 |
Stock options excluded as their inclusion would be antidilutive | 0.3 | 0.4 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income/(Loss) (Details) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | ||
Accumulated Other Comprehensive Income/(Loss) Net Of Tax [Line Items] | ' | ' | ||
Balance at January 1 | ($750) | ($1,186) | ||
Other comprehensive income/(loss) before reclassifications | 6 | 1 | ||
Amounts reclassified from accumulated other comprehensive income/(loss) | 10 | [1] | 16 | [1] |
Net to-date other comprehensive income/(loss), net of taxes | 16 | [2] | 17 | [2] |
Balance at March 31 | -734 | -1,169 | ||
Defined Benefit Plans [Member] | ' | ' | ||
Accumulated Other Comprehensive Income/(Loss) Net Of Tax [Line Items] | ' | ' | ||
Balance at January 1 | -713 | -1,149 | ||
Other comprehensive income/(loss) before reclassifications | 10 | -2 | ||
Amounts reclassified from accumulated other comprehensive income/(loss) | 10 | [1] | 16 | [1] |
Net to-date other comprehensive income/(loss), net of taxes | 20 | 14 | ||
Balance at March 31 | -693 | -1,135 | ||
Foreign Currency Translation [Member] | ' | ' | ||
Accumulated Other Comprehensive Income/(Loss) Net Of Tax [Line Items] | ' | ' | ||
Balance at January 1 | -37 | -36 | ||
Other comprehensive income/(loss) before reclassifications | -4 | 3 | ||
Amounts reclassified from accumulated other comprehensive income/(loss) | 0 | 0 | ||
Net to-date other comprehensive income/(loss), net of taxes | -4 | 3 | ||
Balance at March 31 | -41 | -33 | ||
Derivatives [Member] | ' | ' | ||
Accumulated Other Comprehensive Income/(Loss) Net Of Tax [Line Items] | ' | ' | ||
Balance at January 1 | 0 | -1 | ||
Other comprehensive income/(loss) before reclassifications | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive income/(loss) | 0 | 0 | ||
Net to-date other comprehensive income/(loss), net of taxes | 0 | 0 | ||
Balance at March 31 | $0 | ($1) | ||
[1] | The accumulated other comprehensive income/(loss) reclassification components are 1) prior service cost/(benefit) and 2) net actuarial loss which are both included in the computation of net periodic pension cost. See Note 4 Retirement Plans for additional details. | |||
[2] | Net of deferred taxes of $5 million and $12 million during the three months ended March 31, 2014, and 2013, respectively. |
Accounts_Receivable_Details
Accounts Receivable (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Accounts Receivable Details [Abstract] | ' | ' | ' |
Allowance for doubtful accounts | $1 | ' | $1 |
Allowance for doubtful accounts - receivables not expected to be collected in one year | 21 | ' | 22 |
Receivables Securitization Facility [Abstract] | ' | ' | ' |
Total capacity to transfer undivided interests to investors under the receivables securitization facility | 600 | 600 | 600 |
Value of the outstanding undivided interest held by investors under the receivables securitization facility | 0 | ' | 0 |
Accounts receivable supporting the undivided interest held by investors | 1,200 | ' | 1,100 |
Cost of the receivables securitization facility - interest expense | $1 | $1 | ' |
Properties_Details
Properties (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Cost | $60,519 | $59,812 | ||
Accumulated depreciation | 16,330 | 16,063 | ||
Net book value | 44,189 | 43,749 | ||
Land [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Cost | 5,128 | 5,120 | ||
Net book value | 5,128 | 5,120 | ||
Road: Rail and Other Track Material [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Cost | 14,053 | 13,861 | ||
Accumulated depreciation | 5,048 | 4,970 | ||
Net book value | 9,005 | 8,891 | ||
Estimated useful life | '33 years | '35 years | ||
Road: Ties [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Cost | 8,881 | 8,785 | ||
Accumulated depreciation | 2,357 | 2,310 | ||
Net book value | 6,524 | 6,475 | ||
Estimated useful life | '33 years | '33 years | ||
Road: Ballast [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Cost | 4,663 | 4,621 | ||
Accumulated depreciation | 1,195 | 1,171 | ||
Net book value | 3,468 | 3,450 | ||
Estimated useful life | '34 years | '34 years | ||
Road: Other Roadway [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Cost | 15,737 | [1] | 15,596 | [1] |
Accumulated depreciation | 2,784 | [1] | 2,726 | [1] |
Net book value | 12,953 | [1] | 12,870 | [1] |
Estimated useful life | '48 years | [1] | '48 years | [1] |
Total Road [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Cost | 43,334 | 42,863 | ||
Accumulated depreciation | 11,384 | 11,177 | ||
Net book value | 31,950 | 31,686 | ||
Equipment: Locomotives [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Cost | 7,724 | 7,518 | ||
Accumulated depreciation | 3,544 | 3,481 | ||
Net book value | 4,180 | 4,037 | ||
Estimated useful life | '20 years | '20 years | ||
Equipment: Freight Cars [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Cost | 2,079 | 2,085 | ||
Accumulated depreciation | 990 | 1,000 | ||
Net book value | 1,089 | 1,085 | ||
Estimated useful life | '25 years | '25 years | ||
Equipment: Work Equipment And Other [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Cost | 559 | 561 | ||
Accumulated depreciation | 126 | 119 | ||
Net book value | 433 | 442 | ||
Estimated useful life | '18 years | '18 years | ||
Total Equipment [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Cost | 10,362 | 10,164 | ||
Accumulated depreciation | 4,660 | 4,600 | ||
Net book value | 5,702 | 5,564 | ||
Technology and Other [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Cost | 797 | 711 | ||
Accumulated depreciation | 286 | 286 | ||
Net book value | 511 | 425 | ||
Estimated useful life | '11 years | '10 years | ||
Construction in Progress [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Cost | 898 | 954 | ||
Accumulated depreciation | 0 | 0 | ||
Net book value | $898 | $954 | ||
[1] | Other roadway includes grading, bridges and tunnels, signals, buildings, and other road assets. |
Accounts_Payable_And_Other_Cur1
Accounts Payable And Other Current Liabilities (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 |
In Millions, unless otherwise specified | |||
Accounts Payable and Other Current Liabilities Details [Abstract] | ' | ' | ' |
Accounts payable | $888 | $803 | ' |
Income and other taxes payable | 877 | 491 | ' |
Dividends payable | 407 | 356 | 318 |
Accrued wages and vacation | 395 | 385 | ' |
Accrued casualty costs | 204 | 207 | ' |
Interest payable | 130 | 169 | ' |
Equipment rents payable | 101 | 96 | ' |
Other current liabilities | 554 | 579 | ' |
Total accounts payable and other current liabilities | $3,556 | $3,086 | ' |
Financial_Instruments_Details
Financial Instruments (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Fair Value of Financial Instruments [Abstract] | ' | ' |
Fair value of total debt | $11,100 | $10,200 |
Fair value of total debt in excess of carrying value | 900 | 600 |
Debt securities containing call provisions | 163 | 163 |
Interest Rate Cash Flow Hedges [Abstract] | ' | ' |
Change in fair value of cash flow hedges as reported in accumulated other comprehensive loss | 1 | 1 |
Interest rate cash flow hedges outstanding | $0 | $0 |
Debt_Details_1
Debt (Details 1) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 |
Credit Facilities [Abstract] | ' |
Revolving credit facility available credit | $1,800 |
Revolving credit facility withdrawals | 0 |
Compliance with covenant | 'At March 31, 2014, and December 31, 2013 (and at all times during the first quarter), we were in compliance with this covenant. |
Allowable debt per debt-to-net-worth coverage ratio (as defined in the facility) | 43,000 |
Outstanding debt (as defined by facility) | 10,500 |
Cross-default provision (as defined by facility) | 75 |
Facility expiration date | 25-May-15 |
Commercial paper outstanding | 0 |
Commercial paper issued | 0 |
Commercial paper repaid | $0 |
Debt_Details_2
Debt (Details 2) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Jan. 10, 2014 | Mar. 31, 2014 | Jan. 10, 2014 | Mar. 31, 2014 | Jan. 10, 2014 |
In Millions, unless otherwise specified | Unsecured Debt [Member] | Unsecured Debt [Member] | Unsecured Debt [Member] | Unsecured Debt [Member] | Unsecured Debt [Member] | Unsecured Debt [Member] | ||
2.25% Notes Due 2019 [Member] | 2.25% Notes Due 2019 [Member] | 3.75% Notes Due 2024 [Member] | 3.75% Notes Due 2024 [Member] | 4.85% Notes Due 2044 [Member] | 4.85% Notes Due 2044 [Member] | |||
Shelf Registration Statement and Significant New Borrowings [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance date | ' | ' | 10-Jan-14 | ' | 10-Jan-14 | ' | 10-Jan-14 | ' |
Note amount | ' | ' | ' | $300 | ' | $400 | ' | $300 |
Maturity date on new borrowing | ' | ' | 15-Feb-19 | ' | 15-Mar-24 | ' | 15-Jun-44 | ' |
Interest rate on note | ' | ' | ' | 2.25% | ' | 3.75% | ' | 4.85% |
Board of Directors remaining debt issuance | 1,850 | ' | ' | ' | ' | ' | ' | ' |
Receivables Securitization Facility Debt [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' |
Secured debt under receivables securitization facility | $0 | $0 | ' | ' | ' | ' | ' | ' |
Variable_Interest_Entities_Det
Variable Interest Entities (Details) (USD $) | Mar. 31, 2014 |
In Billions, unless otherwise specified | |
Variable Interest Entities Details [Abstract] | ' |
Future minimum lease payments | $3.20 |
Commitments_And_Contingencies_1
Commitments And Contingencies (Details) (USD $) | 3 Months Ended | 3 Months Ended | ||||||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 |
Personal Injury [Member] | Personal Injury [Member] | Asbestos [Member] | Asbestos [Member] | Environmental [Member] | Environmental [Member] | Guarantees [Member] | Guarantees [Member] | |||
Liability Activity [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitments and contingencies, beginning balance at January 1 | ' | ' | $294 | $334 | $131 | $139 | ' | ' | ' | ' |
Accruals | ' | ' | 23 | 27 | 0 | 0 | ' | ' | ' | ' |
Changes in estimates for prior years | ' | ' | -6 | -8 | ' | ' | ' | ' | ' | ' |
Payments | ' | ' | -17 | -18 | -2 | -3 | ' | ' | ' | ' |
Commitments and contingencies, ending balance at March 31 | ' | ' | 294 | 335 | 129 | 136 | ' | ' | ' | ' |
Commitments and contingencies, current portion, ending balance at March 31 | ' | ' | 78 | 97 | 9 | 9 | ' | ' | ' | ' |
Environmental [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning balance at January 1 | 171 | 170 | ' | ' | ' | ' | ' | ' | ' | ' |
Accruals | 6 | 7 | ' | ' | ' | ' | ' | ' | ' | ' |
Payments | -11 | -11 | ' | ' | ' | ' | ' | ' | ' | ' |
Ending balance at March 31 | 166 | 166 | ' | ' | ' | ' | ' | ' | ' | ' |
Current portion, ending balance at March 31 | 52 | 50 | ' | ' | ' | ' | ' | ' | ' | ' |
Sites identified which we are or may be liable for remediation costs | 269 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sites subject of actions taken by the U.S. government | 31 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sites on the Superfund National Priorities List | 17 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Environmental liability discount rate | ' | ' | ' | ' | ' | ' | 0.00% | 0.00% | ' | ' |
Guarantees [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum potential amount of guarantee payments | ' | ' | ' | ' | ' | ' | ' | ' | 299 | 299 |
Recorded liability for fair value of guarantees | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 1 |
Expiration year of final guarantee | ' | ' | ' | ' | ' | ' | ' | ' | 'The final guarantee expires in 2022. | ' |
Asserted And Unasserted Claims [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percent of liability recorded related to asserted claims | ' | ' | 92.00% | ' | 20.00% | ' | ' | ' | ' | ' |
Percent of liability recorded related to unasserted claims | ' | ' | 8.00% | ' | 80.00% | ' | ' | ' | ' | ' |
Reasonably possible outcome of related claims, range minimum | ' | ' | 294 | ' | ' | ' | ' | ' | ' | ' |
Reasonably possible outcome of related claims, range maximum | ' | ' | 322 | ' | ' | ' | ' | ' | ' | ' |
Future Minimum Lease Payments For Operating Leases [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total minimum operating lease payments | $4,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share_Repurchase_Program_Detai
Share Repurchase Program (Details) (USD $) | 3 Months Ended | |
In Billions, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Shares Repurchased [Abstract] | ' | ' |
BOD authorized | 60,000,000 | ' |
Share repurchases (Note 16) (Shares) | 3,820,000 | 2,881,400 |
Average purchase price | $178.85 | $136.58 |
Remaining number of shares that may be repurchased under current authority | 56,180,000 | ' |
Stock repurchased since inception | $10 | ' |