Union Pacific Corp. (NYSE:UNP)

Debt to Equity Ratio

This ratio showed an upward trend from 1.58 in 2020 to a peak of 2.74 in 2022, indicating increasing leverage. Following this, there was a decline to 1.85 in 2024, suggesting a reduction in reliance on debt relative to equity over the last two years.

Debt to Equity Including Operating Lease Liability

Mirroring the debt to equity ratio pattern, this metric rose from 1.67 in 2020 to 2.87 in 2022. It then decreased progressively to 1.92 by 2024, reflecting a similar leverage dynamic when factoring in operating lease liabilities.

Debt to Capital Ratio

The debt to capital ratio increased steadily from 0.61 in 2020 to 0.73 in 2022, indicating a larger portion of capital structure financed by debt. Afterwards, this ratio moderated downwards to 0.65 by 2024, consistent with the reduction observed in leverage measures.

Debt to Capital Including Operating Lease Liability

This ratio followed the same trajectory as the conventional debt to capital ratio, increasing from 0.63 in 2020 to 0.74 in 2022 before declining to 0.66 in 2024. This pattern reinforces the observation of an initial increase and subsequent decrease in overall indebtedness including lease obligations.

Debt to Assets Ratio

The debt to assets ratio showed a progressive increase from 0.43 in 2020 to 0.51 in 2022, implying a growing debt burden relative to total assets. From 2022 onwards, the ratio decreased to 0.46 in 2024, indicating some deleveraging or asset growth relative to debt.

Debt to Assets Including Operating Lease Liability

Including lease liabilities, the debt to assets ratio increased from 0.45 in 2020 to 0.53 in 2022 and then decreased to 0.48 in 2024. This suggests that lease-related debt followed a similar pattern within the overall asset financing structure.

Financial Leverage Ratio

The financial leverage ratio exhibited an increasing trend from 3.68 in 2020 to 5.38 in 2022, showing heightened use of debt to amplify returns. Subsequently, it declined to 4.01 in 2024, compatible with other leverage metrics decreasing.

Interest Coverage Ratio

The interest coverage ratio improved from 7.12 in 2020 to a high of 8.33 in 2021, reflecting stronger ability to service interest expenses. It then declined to 7.14 in 2023, but increased again to 7.93 in 2024. Overall, this demonstrates a generally stable and adequate ability to meet interest obligations despite fluctuations.

Fixed Charge Coverage Ratio

This ratio rose from 5.79 in 2020 to 6.81 in 2021, followed by a decrease to 5.82 in 2023. It rebounded to 6.47 in 2024, showing a similar trend to interest coverage and indicating relatively consistent capacity to cover fixed financing charges over the period.

Total debt

The total debt showed a consistent increase from 26,729 million USD at the end of 2020 to 33,326 million USD by the end of 2022. However, in the subsequent years, total debt decreased, reaching 31,579 million USD in 2023 and further declining to 31,192 million USD by the end of 2024. This indicates a peak in debt levels during 2022, followed by a gradual reduction over the next two years.

Common shareholders’ equity

Common shareholders' equity exhibited a downward trend from 16,958 million USD in 2020 to 12,163 million USD in 2022, demonstrating a notable decline. This was followed by a recovery phase, with equity increasing to 14,788 million USD in 2023 and further rising to 16,890 million USD in 2024, approaching its initial level observed in 2020.

Debt to equity ratio

The debt-to-equity ratio escalated significantly from 1.58 in 2020 to 2.74 in 2022, reflecting the combined effect of rising debt and declining equity during this period. Thereafter, the ratio improved, decreasing to 2.2 in 2023 and further to 1.85 in 2024. Despite this improvement, the leverage remains higher in 2024 compared to 2020, indicating a more leveraged capital structure relative to the start of the period.

Overall trends and insights

Over the five-year period, total debt initially increased but began to decline after reaching its highest level in 2022. Shareholders' equity declined substantially in the early years but showed recovery in the later years. Correspondingly, the debt to equity ratio peaked in 2022, reflecting increased leverage, before improving in subsequent years while still remaining above the 2020 level. This pattern suggests a phase of heightened financial leverage and risk around 2022, followed by efforts to strengthen the equity base and reduce leverage in the more recent periods.

Total Debt (Including Operating Lease Liability)

The total debt exhibited a rising trend from 28,333 million USD at the end of 2020 to a peak of 34,957 million USD by the end of 2022. Subsequently, it showed a reduction over the next two years, declining to 34,179 million USD in 2023 and further to 32,463 million USD in 2024.

Common Shareholders’ Equity

Common shareholders' equity displayed a downward movement from 16,958 million USD at the end of 2020 to a low of 12,163 million USD in 2022. However, the equity base strengthened considerably thereafter, increasing to 14,788 million USD in 2023 and reaching 16,890 million USD by 2024, slightly surpassing the initial 2020 level.

Debt to Equity Ratio (Including Operating Lease Liability)

The debt to equity ratio rose significantly from 1.67 in 2020 to a high of 2.87 in 2022, indicating a higher reliance on debt relative to equity during this period. Following this peak, the ratio declined to 2.31 in 2023 and further to 1.92 in 2024, reflecting an improved balance between debt and equity financing.

Overall Analysis

The company’s financial leverage increased substantially through 2022, driven by both increasing total debt and declining equity. After this period, the trend reversed with a reduction in debt levels and a notable recovery in equity, leading to a significant improvement in the debt to equity ratio by 2024. This suggests an effort to deleverage and strengthen the equity base in recent years, possibly enhancing financial stability and reducing risk exposure associated with high leverage.

Total Debt

Over the five-year period, total debt exhibited an overall upward trend from 26,729 million USD in 2020 to a peak of 33,326 million USD in 2022. Following this peak, there was a decline in total debt, decreasing to 32,579 million USD in 2023 and further to 31,192 million USD in 2024. This pattern suggests an initial phase of increased leverage, followed by a gradual reduction in debt levels in the last two years.

Total Capital

Total capital showed steady growth over the same period, rising from 43,687 million USD in 2020 to 48,082 million USD in 2024. The increase was consistent year over year, with no declines recorded, indicating a strengthening capital base possibly through retained earnings or capital injections.

Debt to Capital Ratio

The debt to capital ratio reflected the movements in total debt and total capital. Starting at 0.61 in 2020, the ratio increased to a high of 0.73 in 2022, corresponding with the peak in total debt. Subsequently, the ratio decreased to 0.69 in 2023 and further to 0.65 in 2024, mirroring the reduction in the debt balance. Despite this reduction, the ratio remains elevated compared to 2020 levels, indicating that debt still constitutes a significant portion of total capital.

The analysis of the financial data over the five-year period indicates several key trends in the company's capital structure and debt levels.

Total debt (including operating lease liability)

There is a general upward trend in total debt from 28,333 million USD at the end of 2020 to a peak of 34,957 million USD at the end of 2022. Subsequently, total debt decreases moderately to 34,179 million USD in 2023 and further declines to 32,463 million USD in 2024. This suggests a phase of increased borrowing or lease liabilities followed by a gradual deleveraging or reduction in debt exposure.

Total capital (including operating lease liability)

Total capital shows a steady increase throughout the period, rising from 45,291 million USD in 2020 to 49,353 million USD by the end of 2024. This incremental growth implies ongoing accumulation of resources or equity, possibly aligned with business expansion or retained earnings accumulation. The steady increase in total capital alongside changes in debt levels indicates a dynamic capital structure.

Debt to capital ratio (including operating lease liability)

The debt to capital ratio increases from 0.63 in 2020 to a peak of 0.74 in 2022, reflecting a rising proportion of debt financing relative to total capital during this period. After 2022, the ratio declines to 0.70 in 2023 and further to 0.66 in 2024. This pattern aligns with the observed reduction in total debt and suggests a strategic shift towards a more balanced or conservative capital structure with reduced leverage in recent years.

Overall, the data reveals a cycle of increasing leverage until 2022, followed by a controlled reduction in debt relative to capital. The company appears to be managing its debt levels proactively while steadily increasing its total capital base.

Total Debt

The total debt shows a rising trend from 2020 to 2022, increasing from $26,729 million to $33,326 million. Following this peak, there is a decline in debt levels in the subsequent years, falling to $32,579 million in 2023 and further decreasing to $31,192 million by 2024. This indicates a phase of increased borrowing initially, followed by efforts to reduce debt in recent years.

Total Assets

Total assets steadily increase throughout the observed period, starting at $62,398 million in 2020 and growing consistently each year to reach $67,715 million in 2024. This steady growth suggests ongoing asset accumulation or appreciation, reflecting an expanding asset base over time.

Debt to Assets Ratio

The debt to assets ratio rises from 0.43 in 2020 to a peak of 0.51 in 2022, indicating an increasing reliance on debt relative to assets during this period. However, the ratio decreases thereafter to 0.49 in 2023 and further to 0.46 in 2024, aligning with the reduction in total debt observed. Despite fluctuations, the ratio remains below 0.5 after 2022, suggesting a moderate leverage position.

Total debt (including operating lease liability)

The total debt exhibits an overall increasing trend from 28,333 million USD at the end of 2020 to a peak of 34,957 million USD in 2022. Subsequently, it shows a decline to 34,179 million USD in 2023 and further to 32,463 million USD by the end of 2024, indicating a reduction in leverage after 2022.

Total assets

Total assets have steadily increased each year, rising from 62,398 million USD in 2020 to 67,715 million USD in 2024. This consistent growth reflects ongoing asset accumulation or appreciation over the period analyzed.

Debt to assets (including operating lease liability)

The debt-to-assets ratio increased from 0.45 in 2020 to 0.53 in 2022, aligning with the rise in total debt relative to assets. After reaching this peak, the ratio decreased to 0.51 in 2023 and further to 0.48 in 2024, suggesting an improvement in the company’s capital structure and a reduction in financial leverage relative to its asset base.

Total Assets

The total assets of the company showed a consistent upward trend from 2020 to 2024. Starting at $62,398 million in 2020, assets gradually increased each year, reaching $67,715 million by the end of 2024. This steady growth indicates ongoing investment or asset accumulation over the period.

Common Shareholders’ Equity

The common shareholders’ equity experienced a decline from 2020 to 2022, dropping from $16,958 million to $12,163 million. However, this downward trend reversed in 2023, with equity rising to $14,788 million and further increasing to $16,890 million in 2024. This recovery suggests efforts to rebuild equity after a period of contraction.

Financial Leverage

Financial leverage displayed noticeable fluctuations across the years. The ratio increased from 3.68 in 2020 to a peak of 5.38 in 2022, indicating a rise in the company’s use of debt relative to equity. Following this peak, leverage decreased to 4.54 in 2023 and further to 4.01 in 2024, suggesting a reduction in reliance on debt or an improvement in equity levels.

Summary

Overall, the company’s asset base grew steadily over the five-year period, while common shareholders’ equity faced a decline initially but recovered strongly in the latter years. The financial leverage ratio’s increase until 2022 followed by a decrease indicates a period of higher debt utilization that later moderated. These patterns may reflect strategic financial management to balance growth with capital structure optimization.

Earnings before interest and tax (EBIT)

The EBIT has exhibited an overall positive trend from 2020 to 2024. Starting at 8,121 million USD in 2020, it increased significantly in 2021 to 9,635 million USD and continued rising to reach a peak of 10,343 million USD in 2022. However, in 2023, there was a slight decline to 9,573 million USD, followed by a recovery in 2024 with an increase to 10,063 million USD. The fluctuations suggest a period of strong operational performance with minor volatility in the most recent years.

Interest expense

The interest expense has shown a steady increase from 1,141 million USD in 2020 to a peak of 1,340 million USD in 2023. In 2024, there is a moderate reduction to 1,269 million USD. This upward trend in interest expense over the years indicates rising borrowing costs or increased debt levels, with a slight easing in the latest year.

Interest coverage ratio

The interest coverage ratio, which measures the ability to cover interest expenses with EBIT, improved from 7.12 in 2020 to 8.33 in 2021, reflecting stronger earnings relative to interest costs. The ratio slightly declined to 8.14 in 2022, further dropped to 7.14 in 2023, but recovered to 7.93 in 2024. Despite some fluctuations, the coverage ratio remained above 7.0 throughout the period, indicating a relatively strong capacity to meet interest obligations.

Earnings before fixed charges and tax

The earnings before fixed charges and tax exhibit a general upward trend from 2020 to 2024, increasing from 8,438 million USD in 2020 to 10,403 million USD in 2024. There was a peak in 2022 at 10,681 million USD, followed by a slight decline in 2023 to 9,942 million USD, before recovering in 2024. Overall, the earnings show resilience with a minor fluctuation in the middle years.

Fixed charges

Fixed charges increased steadily from 1,458 million USD in 2020 to 1,709 million USD in 2023, representing a rise over this period. However, in 2024, the fixed charges decreased to 1,609 million USD, indicating improved cost control or reduced financial expenses in the most recent year after a period of growth.

Fixed charge coverage ratio

The fixed charge coverage ratio reflects the company's ability to cover its fixed charges with earnings before fixed charges and tax. The ratio improved from 5.79 in 2020 to a peak of 6.81 in 2021, suggesting enhanced financial coverage. It then slightly decreased to 6.64 in 2022 and further to 5.82 in 2023, before improving again to 6.47 in 2024. This pattern aligns with the trends observed in earnings and fixed charges, demonstrating a generally strong but somewhat fluctuating capacity to meet financial obligations over the period.