Union Pac — Income Statement, Cash Flows & Balance Sheet
Is Union Pacific profitable?
Union Pacific is consistently and meaningfully profitable, with net income growing for the third straight year.
| Metric | 2023 | 2024 | 2025 | Change (2024–2025) |
|---|---|---|---|---|
| Total operating revenues ($M) | 24,119 | 24,250 | 24,510 | +1.1% |
| Total operating expenses ($M) | 15,037 | 14,537 | 14,664 | +0.9% |
| Operating income ($M) | 9,082 | 9,713 | 9,846 | +1.4% |
| Operating ratio (expenses ÷ revenues) | 62.3% | 59.9% | 59.8% | Improved |
| Net income ($M) | 6,379 | 6,747 | 7,138 | +5.8% |
| Diluted EPS | $10.45 | $11.09 | $11.98 | +8.0% |
Revenue growth was modest, but Union Pacific continued to wring more profit from each dollar of revenue — an operating ratio below 60% is considered strong in the railroad industry. EPS grew faster than net income because the company has been buying back its own shares, reducing the share count.
A one-time real estate windfall and pending merger costs each distorted the 2025 picture modestly.
| Item | 2023 | 2024 | 2025 |
|---|---|---|---|
| Other income, net ($M) | 491 | 350 | 629 |
| Of which: real estate income ($M) | 414 | 263 | 558 |
| Acquisition-related expense ($M) | — | — | 72 |
Other income jumped in 2025 largely due to $250 million in industrial park land sales, a non-recurring item that boosted pre-tax income. Partially offsetting this, Union Pacific recorded $72 million in costs related to its pending acquisition of Norfolk Southern — also a one-time item. Investors should look past both when assessing the underlying earnings run rate.
Where does Union Pacific's revenue come from?
Union Pacific's three freight groups all grew in 2025, with Bulk and Industrial leading the way.
| Freight group | 2023 ($M) | 2024 ($M) | 2025 ($M) | Change (2024–2025) |
|---|---|---|---|---|
| Bulk | 7,358 | 7,207 | 7,586 | +5.3% |
| Industrial | 8,238 | 8,440 | 8,604 | +1.9% |
| Premium | 6,975 | 7,164 | 7,030 | −1.9% |
| Total freight revenues | 22,571 | 22,811 | 23,220 | +1.8% |
Bulk (think grain, coal, and fertilizers) recovered strongly after a dip in 2024, while Industrial (chemicals, metals, forest products) continued its steady climb. Premium — which includes intermodal containers and automotive — was the one soft spot, slipping back below its 2024 level. Other revenues, which include logistics subsidiaries and accessorial fees, continued a multi-year decline and are not a material growth driver.
Does Union Pacific generate cash?
Union Pacific is a strong cash generator, comfortably funding both heavy reinvestment in its network and substantial shareholder returns.
| Cash flow item | 2023 ($M) | 2024 ($M) | 2025 ($M) | Change (2024–2025) |
|---|---|---|---|---|
| Cash from operations | 8,379 | 9,346 | 9,290 | −0.6% |
| Capital investments | (3,606) | (3,452) | (3,791) | +9.8% |
| Free cash flow (approx.) | 4,773 | 5,894 | 5,499 | −6.7% |
| Dividends paid | (3,173) | (3,213) | (3,236) | +0.7% |
| Share repurchases | (705) | (1,505) | (2,679) | +78.1% |
Operating cash flow remained near its 2024 high, and after capital spending — which rose as Union Pacific maintained and expanded its 33,000-mile network — the business still generated roughly $5.5 billion in free cash flow. The company returned nearly all of that to shareholders through dividends and a significantly accelerated buyback program, the latter of which has now been paused pending the Norfolk Southern acquisition.
How strong is Union Pacific's balance sheet?
Union Pacific carries substantial debt, but its earnings power makes the load manageable — and liquidity is solid.
| Item | 2024 ($M) | 2025 ($M) | Change |
|---|---|---|---|
| Total debt | 31,192 | 31,814 | +$622M |
| Cash and short-term investments | 1,036 | 1,516 | +$480M |
| Net debt (approx.) | 30,156 | 30,298 | +$142M |
| Annual operating income | 9,713 | 9,846 | +1.4% |
| Revolving credit facility available | 2,000 | 2,000 | — |
Debt is large in absolute terms — roughly $32 billion — but Union Pacific's operating income of nearly $10 billion means it generates ample cash to service it. The company also holds a $2 billion undrawn revolving credit line and was fully compliant with its debt covenants at year-end. One significant watch item: if the Norfolk Southern merger proceeds as planned, Union Pacific expects to issue approximately $20 billion in additional cash consideration, funded by new debt and accumulated operating cash flow, which would materially increase leverage.
The asset base is dominated by the physical railroad, which anchors the balance sheet.
| Asset category | 2024 ($M) | 2025 ($M) | Change |
|---|---|---|---|
| Properties, net | 58,343 | 59,645 | +$1,302M |
| Total assets | 67,715 | 69,698 | +$1,983M |
Nearly 86% of total assets are the railroad's physical infrastructure — track, locomotives, bridges, and land — which grows steadily as capital is reinvested each year. This asset base is hard to replicate and underpins the company's durable competitive position.