The Ties That Bind a Nation: Union Pacific

Transcription

1 May 19, 2015 The Ties That Bind a Nation: Union Pacific Ivan Jaime Director Public Affairs 1

2 Presentation Overview Brief History System, Regional & Local Operations Overview Serving a Growing Economy Freight Rail Benefits Passenger Rail & Quiet Zones 2

3 Seattle Eastport Duluth Oakland Portland Salt Lake City Denver Omaha Twin Cities Kansas City Chicago St. Louis Strength of a Unique Franchise Revenue: $24.0 B Memphis Route Miles: 32,000 in 23 States Los Angeles Calexico Nogales El Paso Eagle Pass Dallas Houston New Orleans Employees: 47,200 Annual Payroll: $4.6 B Customers: 10,000 Locomotives: 8,500 Laredo Brownsville 3

4 $4+ Billion of Total Economic Impact! 2014 Union Pacific in Texas Miles of Track: 6,310 Annual Payroll: $741.5 M In-State Purchases: $2.6 B Capital Investment: $623.3 M Employees: 8,282 U.S. Jobs Supported*: 37,269 Community Giving: $1.74 M Charitable Organizations: 411 4

5 San Antonio Area Operations Major Terminal: Headquarters of San Antonio Service Unit; 4 Major Rail Yards; International Customer Service Center; Crew Change & Local Service Active Main Tracks: Del Rio Subdivision Double Main Track, Austin Subdivision #1 & #2, Laredo Subdivision, Corpus Christi Subdivision, Glidden Subdivision, Rockport Subdivision, Kerrville Subdivision approximately 1,200 miles of main track Employee Count: 1,000+ Train Traffic: Estimated Per Day Primary Markets: International Trade with Mexico & Asia; Eagle Ford Shale; Rock Corridor Commodities: Autos & Auto Parts, Aggregates, Fracing Sand, Consumer Goods, Grain, Beer, etc. 5

6 UP and Mexico KCSM 51% Calexico UP Offices Ferromex (FXE) KCSM Ferrosur (FSRR) Líneas Cortas Nogales Hermosillo Culiacan Chihuahua Torreón Aguascalientes Guadalajara El Paso Eagle Pass Manzanillo Lázaro Cárdenas Monclova Saltillo San Luis Potosí Mexico City Laredo Brownsville Monterrey Querétaro Puebla Tampico Veracruz Coatzacoalcos Salina Cruz Mérida FXE 49% *BN has haulage rights over UP at Brownsville Gateway UP BN KCS Gateway Access *Brownsville X X Laredo X X Eagle Pass X X El Paso Imports to XU.S. X Nogales 44% X Calexico X 6

7 Supporting Growth in Mexico UP Border Investments $22 Border-Area Subdivisions ($Millions) $29 $44 $30 $ Maintanence $14 $32 Capacity $24 $53 Close to $1 Billion from West Rail Bridge in Brownsville; opening in 2015 Automatic switches in Laredo; Expanding intermodal ramp in 2016 Additional yard tracks in Eagle Pass; future 2 nd Main New intermodal facility in Santa Teresa, just outside El Paso 7

8 Shale Plays New Market for Railroads 8

9 Union Pacific & The Eagle Ford Shale 9

10 Union Pacific & The Eagle Ford Shale - Continued Since 2009, more than a half dozen short-line railroads have been created and have built more than 200,000-feet of track to serve drilling companies in the Eagle Ford Shale: Gardendale Railroad (pictured above), Port San Antonio, Hondo Railway, Live Oak Railroad, Gonzalez & Northern Railway, Rail Logix, Southton Railroad, etc. Locations have centered on Union Pacific s Corpus Christi, Laredo, Cuero and Del Rio Subdivisions Union Pacific has invested more than $100 million on those subdivisions (i.e. new rail, ties, & 5 new sidings) Movements of fracing sand, pipe & other drilling materials have decreased in last 12 months Aggregate movements, including cement & limestone, remain strong 10

11 Both Passenger & Freight Solutions Required Communities want passenger rail transportation to Reduce traffic congestion Avoid/reduce road construction and maintenance Provide answer to future capacity needs Communities depend on freight rail transportation to Supply the goods they use everyday (food, vehicles, energy) Reduce dependency on foreign oil through its fuel efficiency Generate a carbon footprint that is 75% less than trucks Reduce highway congestion Make products affordable by means of cost-effective shipping Support infrastructure with private funds not taxpayer dollars 11

12 Working Together to Meet Customers Needs For Passenger and Freight UP is willing to discuss passenger rail proposals Safety must be priority Separate track/right-of-way preferable Positive Train Control systems must be present Commuter agencies must meet all UP and FRA safety standards and fund all incremental safety requirements Freight service must not be compromised Including UP s ability to expand, operate on demand, service existing customers and locate new customers Commuter growth capacity must be funded by commuter agency and freight growth capacity must be protected Commuter agencies must indemnify/protect UP against all liability Commuter agencies must pay all costs: developing proposals, return on UP assets/property, UP tax liability, etc. 12

13 First Quarter 2015 Recap Volume Growth Automotive +7% Agricultural Products +3% Chemicals -1% Freight Revenue Mix Industrial 19% Coal 18% Intermodal 18% Agricultural 18% Autos 10% Chemicals 17% Intermodal Industrial Products Coal TOTAL -3% -3% -7% -2% Freight Revenue Performance (Year-Over-Year Change) -2% Volume -4% Fuel Surcharge +4% Core Price +1% Mix -1% Freight Revenue 13

14 2015 Volume Outlook Agricultural Products? Weather / 2015 Crop + Ethanol & DDGs + Beer & Refrigerated Automotive + Strong Industry Sales Continue Coal? Weather - Natural Gas Prices Chemicals + Most Markets Remain Solid - Crude Oil Prices and Spreads Industrial Products - Shale Drilling + Construction Products + Housing Intermodal + Domestic Highway Conversions + Consumer Demand? International 14

15 Strengthening the Franchise ~$4.2 Billion 2015 Capital Plan* *In millons. Includes cash capital, leases and other non-cash capital. 15

16 Rails Are One of America s Safest Industries Injuries and illnesses per 100 Full-time Employees, RRs Avg. All Private Industry Water Transp. Mining Constr. Manuf. Food & Bev. Trucks Agric. Air Transp. Source: U.S. Bureau of Labor Statistics for 2012 data. 16

17 Safety is Top Priority GOOD 44% 38% 12% EMPLOYEE DERAILMENT PUBLIC Reportable Injuries Per 200,000 Employee Hours Reportable Derailments Per Million Train Miles Grade Crossing Accidents Per Million Train Miles 17

18 Offering Cleaner Skies & Clearer Roads Energy independence Four times more fuel efficient than trucks Hauls one ton of freight 500 miles on one gallon of fuel Moved double the freight on the same amount of fuel since 1980 Each train can take up to 300 trucks off highways Intercity Freight Transportation [Based on Ton Miles] Other Freight 26% Trucking 31% Freight RRs 43% Transportation Greenhouse Gas Emissions Other Freight 13.9% Trucking 78.1% Freight RRs 8.0% Source: EPA, AAR 18

19 Railroads: Environmental Transportation Solution 2011 U.S. Greenhouse Gas Emissions Non-transportation 73.0% Freight RR 0.6% Other Freight 1.3% Trucking 6.0% Passenger 19.1% *Source: EPA Passenger transportation includes on-road vehicles, aircraft, recreational boats, passenger rail 19

20 Who Pays for Freight Transportation Capacity? One mile of highway: Cost: $15 million Paid for by: taxpayers One mile of rail: Cost: $2-3 million Paid for by: private industry 20

21 Questions? The Men & Women of Union Pacific Are Dedicated to Serve. Union Pacific works for the good of our customers, our shareholders and one another. Our commitment defines us and drives the economic strength of our company & country. Our Values Focus on Performance: Our concentration and determination will drive our safety, customer satisfaction and quality results. Ensure High Ethical Standards: Our reputation will always be a source of pride for our employees and a bond with our customers, shareholders and community partners. Work as a Team: We are all part of the same team, and working together to reach our common goals is one of our strengths. Communication and respect is the foundation of great teamwork. 21