Union Pacific Corporation (UNP) 2021年年度報告「NYSE」.pdf

《Union Pacific Corporation (UNP) 2021年年度報告「NYSE」.pdf》由會員分享，可在線閱讀，更多相關《Union Pacific Corporation (UNP) 2021年年度報告「NYSE」.pdf（74頁珍藏版）》請在三個皮匠報告上搜索。

1、TableofContentsUNITEDSTATESSECURITIESANDEXCHANGECOMMISSIONWASHINGTON,D.C.20549FORM10-K(MarkOne)ANNUALREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934ForthefiscalyearendedDecember31,2021ORTRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934Forthetransitionperiodf

2、rom_to_CommissionFileNumber1-6075UNIONPACIFICCORPORATION(Exactnameofregistrantasspecifiedinitscharter)Utah13-2626465(Stateorotherjurisdictionof(I.R.S.Employerincorporationororganization)IdentificationNo.)1400DouglasStreet,Omaha,Nebraska(Addressofprincipalexecutiveoffices)68179(ZipCode)(402)544-5000(

3、Registrantstelephonenumber,includingareacode)SecuritiesregisteredpursuanttoSection12(b)oftheAct:TitleofeachClassTradingSymbolNameofeachexchangeonwhichregisteredCommonStock(ParValue$2.50pershare)UNPNewYorkStockExchangeIndicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oft

4、heSecuritiesAct.YesNoIndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheAct.YesNoIndicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterpe

5、riodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.YesNoIndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyeveryInteractiveDataFilerequiredtobesubmittedpursuanttoRule405ofRegulationS-T(232.405ofthischapter)duringthepreceding1

6、2months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitsuchfiles).YesNoIndicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,asmallerreportingcompany,oranemerginggrowthcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler,”

7、“smallerreportingcompany,”and“emerginggrowthcompany”inRule12b-2oftheExchangeAct.LargeAcceleratedFiler AcceleratedFilerNon-AcceleratedFilerSmallerReportingCompany EmergingGrowthCompanyIfanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplying

8、withanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.IndicatebycheckmarkwhethertheregistranthasfiledareportonandattestationtoitsmanagementsassessmentoftheeffectivenessofitsinternalcontroloverfinancialreportingunderSection404(b)oftheSarbanes-OxleyAct(15U.S.C.7

9、262(b)bytheregisteredaccountingfirmthatpreparedorissueditsauditreport.Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheAct).YesNoAsofJune30,2021,theaggregatemarketvalueoftheregistrantsCommonStockheldbynon-affiliates(usingtheNewYorkStockExchangeclosingprice)was$142.0bil

10、lion.ThenumberofsharesoutstandingoftheregistrantsCommonStockasofJanuary28,2022,was636,898,957.TableofContentsDocumentsIncorporatedbyReferencePortionsoftheregistrantsdefinitiveProxyStatementfortheAnnualMeetingofShareholderstobeheldonMay12,2022,areincorporatedbyreferenceintoPartIIIofthisreport.Theregi

11、strantsProxyStatementwillbefiledwiththeSecuritiesandExchangeCommission(SEC)within120daysaftertheendofthefiscalyearthatthisreportrelatespursuanttoRegulation14A.UNIONPACIFICCORPORATIONTABLEOFCONTENTSChairmansLetter3DirectorsandSeniorManagement4PARTIItem1.Business5Item1A.RiskFactors9Item1B.UnresolvedSt

12、affComments12Item2.Properties13Item3.LegalProceedings15Item4.MineSafetyDisclosures16ExecutiveOfficersoftheRegistrantandPrincipalExecutiveOfficersofSubsidiaries17PARTIIItem5.MarketfortheRegistrantsCommonEquity,RelatedStockholderMatters,andIssuerPurchasesofEquitySecurities18Item6.Reserved19Item7.Manag

13、ementsDiscussionandAnalysisofFinancialConditionandResultsofOperations19CriticalAccountingEstimates19CautionaryInformation32Item7A.QuantitativeandQualitativeDisclosuresAboutMarketRisk32Item8.FinancialStatementsandSupplementaryData33ReportofIndependentRegisteredPublicAccountingFirm34Item9.Changesinand

14、DisagreementswithAccountantsonAccountingandFinancialDisclosure61Item9A.ControlsandProcedures61ManagementsAnnualReportonInternalControlOverFinancialReporting61ReportofIndependentRegisteredPublicAccountingFirm62Item9B.OtherInformation63Item9C.DisclosureRegardingForeignJurisdictionsthatPreventInspectio

15、ns63PARTIIIItem10.Directors,ExecutiveOfficers,andCorporateGovernance63Item11.ExecutiveCompensation63Item12.SecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholderMatters63Item13.CertainRelationshipsandRelatedTransactionsandDirectorIndependence63Item14.PrincipalAccountantFeesandS

16、ervices64PARTIVItem15.ExhibitandFinancialStatementSchedules64Item16.Form10-KSummary67Signatures68Certifications722TableofContentsFebruary4,2022FellowShareholders:UnionPacificdemonstratedagainin2021thatourteamis“bestinclass”aswenavigatedchallengesfromthepandemicandnumerousoperationaldisruptions.Thepa

17、ndemiccontinuedtoimpactourdailylivesanddisruptsupplychainsinsignificantways.Despitethesewide-rangingimpacts,theUnionPacificteamachievedrecordfinancialresults.In2021,wearereportingearningspershareof$9.95,whichisa26%increaseversus2020.Totalvolumesincreased4%versus2020,asoureconomycontinuedtorecoverfro

18、mthepandemicimpacts.Operatingratiowasarecord57.2%,270basispointsbetterthan2020s59.9%demonstratingcontinuedfocusonefficientoperations.2020resultswerenegativelyimpactedbyaone-time$278millionnon-cashimpairmentchargethatreducedearningspershareby$0.31andincreasedoperatingratioby140basispoints.Safetyisfou

19、ndationaltoeverythingwedoatUnionPacific.2021safetyresultsdidnotmeetourexpectations.In2022,wearecontinuingtoengageexternalexpertstohelpusgetbackontracktoworldclassindustrialsafetyperformance.Weareimplementingmoreeffectivewaystocoach,train,androot-causeanalyze,allwhilebuildingastronger,deepersafetycul

20、ture.Nothingismoreimportantthanmakingsureeveryemployeereturnshomesafely.During2021,werolledoutanewstrategicplanwecall,“Serve,Grow,Win,Together.”Theessenceofourstrategyisunchangedhowever,asourcultureevolves,itsimperativethatwehaveastrategicplanthatclearlydefinesourpathtolong-termsustainablegrowth.Eve

21、rythingwedostartswithServeandthetransportationproductsweprovideourcustomers.PrecisionScheduledRailroading(PSR)isthefoundationfordeliveringcustomer-centeredoperationalexcellenceandcreatingamoreresilientandagileserviceproduct.In2021,weather,wildfires,supplychaindisruptions,andpandemicimpactstocrewavai

22、labilityallimpededourabilitytofurtherimproveourserviceproduct.Freightcarvelocitywasdown8%versus2020,loweringTripPlanComplianceforbothIntermodalandManifest/Autos8points.Beyondreliableservice,ourcustomerswant“greener”transportationoptions.Everycarloadoffreightwetakeoffthehighwaysavesfuel,lowersemissio

23、ns,andreduceshighwaycongestion.Wetookstepstowardourlong-termemissionreductiongoalsbyachievingabest-everfuelconsumptionrate,improving1%versus2020,helpingourcustomerseliminateroughly23millionmetrictonsofgreenhousegasemissionsbychoosingrailversustruck.Tosupportourserviceproduct,wecontinuetomakesignific

24、antinvestmentsinourinfrastructure.In2021,weinvestedapproximately$3.0billion,completing15sidingextensions,openingpop-upintermodalterminalsintheTwinCities,MN,andWestColton,CA,modernizing100locomotives,andhardeningourinfrastructure.Wealsoinvestedinenergymanagementsystemstoreducefuelconsumptionandtheres

25、ultingcarbonemissions.TheseinvestmentsalsounderpinthenexttenetofourstrategyGrow.WebelievewehavethebestrailfranchiseinNorthAmerica.Byprovidingaqualityserviceproduct,alongwiththelowestcoststructureintheindustry,wearewellpositionedtohandlemorebusinessfornewandexistingcustomers.Weseemanyopportunitiestog

26、row,whetherbyprovidingmoreservicesforourcustomersorbyexpandingourreachthroughnewtransloadfacilitiesorpop-upintermodalterminals.Improvingthecustomerexperienceiscriticalandtechnologyplaysakeyrole.Ourindustryleadingpracticesprovideourcustomerswithapplicationprogramminginterfaces(API),withover50services

27、launched,weareintegratingdeeperintoourcustomerssystemsandsupplychains.Andourteamiswinninginthemarketplace!Wewelcomednewcustomersin2021,areonboardingmorein2022,andalreadysettingthestageforagreat2023withasignificantdomesticintermodalwin.Successfulexecutionofourplansto“Serve”and“Grow”leadstoWin.Forours

28、hareholders,winningmeansgeneratingbest-in-industrycashreturns.In2021,wepaiddividendsof$2.8billion,whichincludedtwo10%dividendincreasesduringtheyear.Inaddition,werepurchased33millionUnionPacificshares,decreasingourfull-yearaveragesharecount3%.Combiningdividendsandsharerepurchases,UnionPacificreturned

29、$10.1billiontoourshareholdersin2021.Ourdefinitionof“winning”extendstoallUPsstakeholders,whichisthefinalpieceofourstrategy Together.OurcomprehensiveapproachtoEnvironmentalSocialGovernance(ESG)issues,“BuildingaSustainableFuture2030”,isdesignedtoaddresstheevolvingneedsofourstakeholders.In2021,wetookmaj

30、orstepsonourESGjourney,beginningwiththeJulyreleaseofour2018,2019,and2020EEO-1reports,providingincreasedtransparencytoourworkforcedemographics.Andwecontinuetoreportquarterlyprogresstowardsourlong-termdiversityrepresentationgoals.Further,inDecember,wereleasedourinitialClimateActionPlan,layingoutourpla

31、ntoachieveour2030carbonemissionreductiongoals,approvedinFebruarybytheScienceBasedTargetsinitiative(SBTi),andourcommitmenttoNetZeroby2050,theonlyU.S.railtodoso.Everyyearcanbringrealchallengestoour“outdoorfactory”,althoughthelasttwoyearswereunique.Inresponse,theresiliencyoftheUnionPacificteamhasbeenon

32、fulldisplay,andouremployeeshavepositionedourCompanyforevengreatersuccessin2022.Aswepreparetocelebrateour160thanniversaryin2022,wearefocusedoncustomer-centeredoperationalexcellence,growingwithourcustomers,andwinningtogetherwithallourstakeholders.ThefutureisverybrightforUnionPacific.Chairman,President

33、,andChiefExecutiveOfficer3TableofContentsDIRECTORSANDSENIORMANAGEMENTBOARDOFDIRECTORSAndrewH.Card,Jr.LanceM.FritzThomasF.McLartyIIIFormerWhiteHouseChairman,President,andChairmanChiefofStaffChiefExecutiveOfficerMcLartyAssociatesBoardCommittees:CompensationandBenefits,CorporateGovernanceUnionPacificCo

34、rporationandUnionPacificRailroadCompanyBoardCommittees:Finance(Chair),CorporateGovernanceandandNominatingNominatingDeborahC.HopkinsWilliamJ.DeLaneyFormerChiefExecutiveOfficerJoseH.VillarrealFormerChiefExecutiveOfficerCitiVenturesandFormerRetiredAdvisorSyscoCorporationChiefInnovationOfficerCitiAkin,G

35、ump,Strauss,Hauer,&BoardCommittees:Audit,BoardCommittees:Audit,FinanceFeld,LLPCompensationandBenefits(Chair)BoardCommittees:CompensationJaneH.LuteandBenefits,CorporateGovernanceDavidB.DillonStrategicAdvisorandNominatingFormerChairmanandCEOSICPA,NorthAmericaTheKrogerCompanyBoardCommittees:Audit,Corpo

36、rateChristopherJ.WilliamsBoardCommittees:Audit(Chair),GovernanceandNominatingChairmanCompensationandBenefitsSiebertWilliamsShank&Co.MichaelR.McCarthyBoardCommittees:Audit,FinanceSheriH.EdisonChairmanMcCarthyGroup,LLCFormerExecutiveVicePresidentandCo-ChairmanBridgesTrustCompanyGeneralCounselAmcorplcL

37、eadIndependentDirectorBoardCommittees:PendingAssignmentBoardCommittees:CorporateGovernanceandNominating(Chair),FinanceSENIORMANAGEMENT*LanceM.FritzRahulJalaliCraigV.RichardsonChairman,President,andSeniorVicePresidentInformationExecutiveVicePresident,ChiefLegalChiefExecutiveOfficerTechnologiesandChie

38、fInformationOfficer,andCorporateSecretaryOfficerPrentissW.Bolin,Jr.KennyG.RockerVicePresidentExternalRelationsMichaelV.MillerExecutiveVicePresidentMarketingVicePresidentandTreasurerandSalesBryanL.ClarkVicePresidentTaxScottD.MooreToddM.RynaskiSeniorVicePresidentCorporateVicePresidentandControllerEric

39、J.GehringerRelationsandExecutiveVicePresidentOperationsChiefAdministrativeOfficerElizabethF.WhitedExecutiveVicePresidentJenniferL.HamannClarkJ.PonthierSustainabilityandStrategyExecutiveVicePresidentSeniorVicePresidentSupplyChainandChiefFinancialOfficerandContinuousImprovement*Seniormanagementareelec

40、tedofficersofbothUnionPacificCorporationandUnionPacificRailroadCompany,exceptMessrs.Gehringer,Ponthier,andRockerareelectedofficersforUnionPacificRailroadCompany.4TableofContentsPARTIItem1.BusinessGENERALUnionPacificRailroadCompanyistheprincipaloperatingcompanyofUnionPacificCorporation.OneofAmericasm

41、ostrecognizedcompanies,UnionPacificRailroadCompanyconnects23statesinthewesterntwo-thirdsofthecountrybyrail,providingacriticallinkintheglobalsupplychain.TheRailroadsdiversifiedbusinessmixincludesBulk,Industrial,andPremium.UnionPacificservesmanyofthefastest-growingU.S.populationcenters,operatesfromall

42、majorWestCoastandGulfCoastportstoeasterngateways,connectswithCanadasrailsystems,andistheonlyrailroadservingallsixmajorMexicogateways.UnionPacificprovidesvaluetoitsroughly10,000customersbydeliveringproductsinasafe,reliable,fuel-efficient,andenvironmentallyresponsiblemanner.UnionPacificCorporationwasi

43、ncorporatedinUtahin1969andmaintainsitsprincipalexecutiveofficesat1400DouglasStreet,Omaha,NE68179.Thetelephonenumberatthataddressis(402)544-5000.ThecommonstockofUnionPacificCorporationislistedontheNewYorkStockExchange(NYSE)underthesymbol“UNP”.Forpurposesofthisreport,unlessthecontextotherwiserequires,

44、allreferenceshereinto“UPC”,“Corporation”,“Company”,“we”,“us”,and“our”shallmeanUnionPacificCorporationanditssubsidiaries,includingUnionPacificRailroadCompany,whichweseparatelyrefertoas“UPRR”orthe“Railroad”.STRATEGYTheCompanysgrowthstrategyfocusesongrowingcustomervaluethroughinnovativesupplychainsolut

45、ionsandaspiringtoServe,Grow,WinTogether.Serve:Drivingoperationalexcellencetocreateasafer,morereliableandefficientserviceproduct.Precisionscheduledrailroading(PSR)isthefoundationfordeliveringcustomer-centeredoperationalexcellenceby:1.Shiftingthefocusofoperationsfrommovingtrainstomovingcars.2.Minimizi

46、ngcardwell,carclassificationevents,andlocomotivepowerrequirements.3.Utilizinggeneral-purposetrainsbyblendingexistingtrainservice.4.Balancingtrainmovementstoimprovetheutilizationofcrewsandrailassets.Weaimtomovecarsfasterandreducethenumberoftimeseachcaristouched,resultinginterminalconsolidationopportu

47、nities,improvedassetutilization,andfewercarclassifications,whichinturnleadstoproductsgettingtothemarketquickerandmorereliably.Theresultisabettercustomerexperience,whichenablesustogrowourmarketshare.Grow:Byharnessingthepotentialofthebestrailfranchiseintheindustry,weexpecttogenerategrowthinthreewaysin

48、creasingprofitablecarloadsthatfitournetworkandtransportationplanprovidingmoreproductsandservicestocreatevalueforourcustomersandincreasingthegeographicreachofourfranchisethroughinnovativesupplychainsolutions.Win:Drivingstrongfinancialperformanceresultinginsignificantshareholderreturns.Executionofourp

49、lanstobothserveandgrow,leadstohigherrevenueswithimprovedmarginsandgreatercashgeneration,creatinglongtermenterprisevalue.Together:EngagingourfourstakeholdergroupsCommunities,Customers,Employees,andShareholders.OurcomprehensiveapproachtoEnvironmentalSocialGovernance(ESG)issues,“BuildingaSustainableFut

50、ure2030,”isdesignedtoaddresstheevolvingneedsofourstakeholdersandisbuiltonfourareasofconcentrationInvestinginourWorkforce,DrivingSustainableSolutions,ChampioningEnvironmentalStewardship,andStrengtheningourCommunitiestoalignwithourstakeholdergroups.Webelievethatoperationalexcellenceandanengagedworkfor

51、cewithdeepmarketknowledgeandstrongcustomerrelationshipswillsupportbest-in-classsafety,acustomerexperiencethatdrivesgrowth,andshareholderreturns.Asweworktotransformourrailroadintothesafest,mostreliable,andmostefficientinNorthAmerica,ourvalueswillcontinueguidingus.Ourpassionforperformancewillhelpuswin

52、ourhighethicalstandardswillleadustowininawaythatsupportsallofourstakeholdersandourteamworkwillmakesurewewintogether.OPERATIONSTheRailroad,alongwithitssubsidiariesandrailaffiliates,isouronereportableoperatingsegment.Althoughweproviderevenuebycommoditygroup,weanalyzethenetfinancialresultsoftheRailroad

53、asonesegmentduetotheintegratednatureofourrailnetwork.Additionalinformationregardingourbusinessandoperations,includingrevenues,financialinformationanddata,andotherinformationregardingenvironmentalmatters,ispresentedinRiskFactors,Item1ALegalProceedings,Item3ManagementsDiscussionandAnalysisofFinancialC

54、onditionandResultsofOperations,Item7andtheFinancialStatementsandSupplementaryData,Item8(whichincludeinformationregardingrevenues,statementsofincome,andtotalassets).5TableofContentsOperations UPRRisaClassIrailroadoperatingintheU.S.Wehave32,452routemiles,connectingPacificCoastandGulfCoastportswiththeM

55、idwestandeasternU.S.gatewaysandprovidingseveralcorridorstokeyMexicangateways.WeservetheWesterntwo-thirdsofthecountryandmaintaincoordinatedscheduleswithotherrailcarrierstomovefreighttoandfromtheAtlanticCoast,thePacificCoast,theSoutheast,theSouthwest,Canada,andMexico.Exportandimporttrafficmovesthrough

56、GulfCoastandPacificCoastportsandacrosstheMexicanandCanadianborders.In2021,wegeneratedfreightrevenuestotaling$20.2billionfromthefollowingthreecommoditygroups:2021FreightRevenuesBulkTheCompanysBulkshipmentsconsistofgrainandgrainproducts,fertilizer,foodandrefrigerated,andcoalandrenewables.In2021,thisgr

57、oupgenerated33%ofourfreightrevenues.Weaccessmostmajorgrainmarkets,connectingtheMidwestandWesternU.S.producingareastoexportterminalsinthePacificNorthwestandGulfCoastportsaswellasMexico.Wealsoservesignificantdomesticmarkets,includinggrainprocessors,animalfeeders,andethanolproducersintheMidwestandWest.

58、FertilizermovementsoriginateintheGulfCoastregion,Midwest,westernU.S.,andCanada(throughinterlineaccess)fordeliverytomajoragriculturalusersinthoseareasaswellasabroad.TheRailroadsnetworksupportsthetransportationofcoalshipmentstoindependentandregulatedpowercompaniesandindustrialfacilitiesthroughouttheU.

59、S.Throughinterchangegatewaysandports,UPRRsreachextendstoeasternU.S.utilitiesaswellastoMexicoandotherinternationaldestinations.CoaltrafficoriginatinginthePowderRiverBasin(PRB)areaofWyomingisthelargestportionoftheRailroadscoalbusiness.Renewableshipmentsforcustomerscommittedtosustainabilityconsistprima

60、rilyofbiomassexportsandwindturbinecomponents.IndustrialOurextensivenetworkfacilitatesthemovementofnumerouscommoditiesbetweenthousandsoforiginanddestinationpointsthroughoutNorthAmerica.TheIndustrialgroupconsistsofseveralcategories,includingconstruction,industrialchemicals,plastics,forestproducts,spec

61、ializedproducts(primarilywaste,salt,androofing),metalsandores,petroleum,liquidpetroleumgases(LPG),sodaash,andsand.Transportationoftheseproductsaccountedfor36%ofourfreightrevenuesin 2021.Commercial,residential,andgovernmentalinfrastructureinvestmentsdriveshipmentsofsteel,aggregates,cement,andwoodprod

62、ucts.Industrialandlightmanufacturingplantsreceivesteel,nonferrousmaterials,minerals,andotherrawmaterials.Theindustrialchemicalsmarketconsistsofavastnumberofchemicalcompoundsthatsupportthemanufacturingofmorecomplexchemicals.Plasticsshipmentssupportautomotive,housing,andthedurableanddisposableconsumer

63、goodsmarkets.Forestproductshipmentsincludelumberandpapercommodities.LumbershipmentsoriginateprimarilyinthePacificNorthwestorwesternCanadaandmovethroughouttheU.S.foruseinnewhomeconstructionandrepairsandremodeling.Papershipmentsprimarilysupportpackagingneeds.Oilandgasdrillinggeneratesdemandforrawsteel

64、,finishedpipe,stone,anddrillingfluidcommodities.TheCompanyspetroleumandLPGshipmentsareprimarilyimpactedbyrefineryutilizationrates,regionalcrudepricingdifferentials,pipelinecapacity,andtheuseofasphaltforroadprograms.SodaashoriginatesinsouthwesternWyomingandCalifornia,destinedforchemicalandglassproduc

65、ingmarketsinNorthAmericaandabroad.PremiumIn2021,Premiumshipmentsgenerated31%ofUnionPacificstotalfreightrevenues.Premiumincludesfinishedautomobiles,automotiveparts,andmerchandiseinintermodalcontainers,bothdomesticandinternational.Internationalbusinessconsistsofimportandexporttrafficmovingin20or40-foo

66、tshippingcontainers,thatmainlypassthroughWestCoastports,destinedforoneoftheCompanysmanyinlandintermodalterminals.DomesticbusinessincludescontainerandtrailertrafficpickedupanddeliveredwithinNorthAmericaforintermodalmarketingcompanies(primarilyshipperagentsandlogisticscompanies)aswellastruckloadcarrie

67、rs.WearethelargestautomotivecarrierwestoftheMississippiRiverandoperateoraccess38vehicledistributioncenters.TheRailroadsextensivefranchiseservesfivevehicleassemblyplantsandconnectstoWestCoastports,allsixmajorMexicogateways,andthePortofHoustontoaccommodatebothimportandexportshipments.Inadditiontotrans

68、portingfinishedvehicles,theCompanyprovidesexpeditedhandlingofautomotivepartsinbothboxcarsandintermodalcontainersdestinedforMexico,theU.S.,andCanada.SeasonalitySomeofthecommoditieswecarryhavepeakshippingseasons,reflectingeitherorboththenatureofthecommodity(suchascertainagriculturalandfoodproductsthat

69、havespecificgrowingandharvestingseasons)andthedemandcycleforthecommodity(suchasintermodaltrafficthatgenerallypeaksduringthethirdquartertomeetback-to-schoolandholiday-relateddemandforconsumergoodsduringthefourthquarter).Thepeakshippingseasonsforthesecommoditiescanvaryconsiderablyeachyeardependingupon

70、variousfactors,includingthestrengthofdomesticandinternationaleconomiesandcurrenciesconsumerdemandthestrengthofharvests,whichcanbeadverselyaffectedbysevereweatherandmarketpricesforagriculturalproducts.Proud&EngagedWorkforceSafetyisatoppriorityatUnionPacific.Wecontinuetoimprovetechnology,enhanceproces

71、ses,andfosteraculturefocusedonoperatingsafely,remainingfocusedonidentifyingandmanagingrisks,andtrainingouremployees.Oursuccessismeasuredbyourpersonalinjuryrate(thenumberofreportableinjuriesforevery200,000employee-hoursworked),andourequipmentincidentrate(thenumberofreportableequipmentincidentspermill

72、iontrainmiles).WeprovidebothmeasurestotheFederalRailroadAdministration(FRA).Personalinjuriesaredefinedasondutyincidentsoroccupationalillnessesthatrequireemployeestolosetimeawayfromwork,modifytheirnormalduties,orreceivecertaintypesofmedicaltreatment.Equipmentincidentsaredefinedasanyoccurrencethatcaus

73、esdamagetoassetsabovethemonetaryreportingthresholdregardlessofownership($11,200for2021and$11,300for2022).6TableofContentsOurgoalistohaveeveryemployeereturnhomesafelyeveryday.Our2021personalinjuryrateof0.98andequipmentincidentrateof3.80didnotmeetexpectationsandillustratesthatwehaveworktodotoachievean

74、incident-freeenvironment.Our2021personalinjuryrateincreased9%andourequipmentincidentrateincreased7%versus 2020.(SeefurtherdiscussioninManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations,Item7,ofthisreport.)Werecruitanddeveloptalentedindividualsdedicatedtoourmissionofserviceand

75、whoarepassionateaboutperformingtothebestoftheirabilitieswhileworkingasoneteam.Wevaluepeoplefromallbackgroundsandwalksoflife,andweempoweremployeestolaunchandgrowtheircareerwithintheCompany.AsofDecember31,2021,theCompanyemployed32,124employees.Webelieveadiverseworkforceprovidesaccesstotheskillsandchar

76、acterweneedtofosterinnovativeideasanddriveoptimalbusinessgrowth.Drawingondifferentexperiencesandexpertiseiscriticalforstrategicdecision-making,problem-solving,leadershipdevelopment,andcreativity.UnionPacificscommitment,todayandforthefuture,istofurtherimproveandstrengthenperformancethroughaninclusive

77、workforcethatreflectsthediversemarketsandcommunitiesweserve,whereeveryoneistreatedfairly,anddifferencesarevalued.Tothatend,UnionPacificestablishedagoaltoreach40%peopleofcolorand11%femalerepresentationinourworkforceby2030.AsofDecember31,2021,workforcerepresentationofpeopleofcolorandfemaleswasapproxim

78、ately31.3%and5.3%,respectively.Providingemployeeswithmeaningfulworkandfulfillingcareersisimportanttous.Weoffercompetitivecompensationtoouremployees.WebelieveemployeesaremoreproductivewhentheirfinancialsuccessisalignedwiththeCompanyssuccess.InMay2021,ourshareholdersapprovedouremployeestockpurchasepla

79、n(ESPP),allowingparticipantstoreceivea40%Companymatchofupto5%oftheirbasecompensation(limitedto$15,000annually)topurchasesharesintheCompanystock.OurBoardofDirectorsevaluatesournon-unioncompensationplansandreviewsrecommendationsfromtheCompensationandBenefitsCommittee,whilecollectivebargainingagreement

80、sgoverncompensationforourunionemployees.ThemedianannualcompensationforallemployeesemployedasofDecember31,2021,was$81,179(excludingtheCEO).LaborAgreementsApproximately84%ofourfull-timeemployeesarerepresentedby13majorrailunions.PursuanttotheRailwayLaborAct(RLA),ourcollectivebargainingagreementsaresubj

81、ecttomodificationeveryfiveyears.ExistingagreementsremainineffectuntilnewagreementsareratifiedoruntiltheRLAproceduresareexhausted.TheRLAproceduresincludemediation,potentialarbitration,cooling-offperiods,andthepossibilityofPresidentialEmergencyBoardsandCongressionalintervention.Thecurrentroundofnegoti

82、ationsbeganonJanuary1,2020,relatedtoyears2020-2024,andallcollectivebargaininggroupsarecurrentlyinthemediationphase.Contractnegotiationshistoricallycontinueforanextendedperiodoftime,andworkstoppagesduringnegotiationsarerare(see“StrikesorWorkStoppagesCouldAdverselyAffectOurOperations”intheRiskFactorsi

83、nItem1Aofthisreport).RailroadSecurityOursecurityeffortsconsistofawidevarietyofmeasures,includingemployeetraining,engagementwithourcustomers,trainingofemergencyresponders,andpartnershipswithnumerousfederal,state,andlocalgovernmentagencies.Whilefederallawrequiresustoprotecttheconfidentialityofoursecur

84、ityplansdesignedtosafeguardagainstterrorismandothersecurityincidents,thefollowingprovidesageneraloverviewofoursecurityinitiatives.UPRRSecurityMeasuresWemaintainacomprehensivesecurityplandesignedtobothdeterandrespondtoanypotentialoractualthreatsastheyarise.Theplanincludesfourlevelsofalertstatus,eachw

85、ithitsownsetofcountermeasures.Weemployourownpoliceforce,consistingofcommissionedandhighly-trainedofficers.Thepolicearecertifiedstatelawenforcementofficerswithinvestigativeandarrestpowers.TheUnionPacificPoliceDepartmenthasachievedaccreditationundertheCommissiononAccreditationforLawEnforcementAgencies

86、,Inc.(CALEA)forcomplyingwiththehighestlawenforcementstandards.Ouremployeesundergorecurrentsecurityandpreparednesstrainingaswellasfederallymandatedhazardousmaterialsandsecuritytraining.Weregularlyreviewthesufficiencyofouremployeetrainingprograms.Wemaintainthecapabilitytomovecriticaloperationstoback-u

87、pfacilitiesindifferentlocations.Weoperateanemergencyresponsemanagementcenter24hoursaday.Thecenterreceivesreportsofemergencies,dangerousorpotentiallydangerousconditions,andothersafetyandsecurityissuesfromouremployees,thepublic,lawenforcement,andothergovernmentofficials.Incooperationwithgovernmentoffi

88、cials,wemonitorboththreatsandpublicevents,and,asnecessary,wemayalterrailtrafficflowattimesofconcerntominimizerisktocommunitiesandouroperations.Wecomplywiththehazardousmaterialsroutingrulesandotherrequirementsimposedbyfederallaw.Wedesignouroperatingplantoexpeditethemovementofhazardousmaterialshipment

89、stominimizethetimerailcarsremainidleatyardsandterminalslocatedinornearmajorpopulationcenters.Additionally,incompliancewithTransportationSecurityAgencyregulations,wedeployedinformationsystemsandinstructedemployeesintrackinganddocumentingthehandoffofRailSecuritySensitiveMaterialswithcustomersandinterc

90、hangepartners.Weestablishedanumberofourowninnovativesafetyandsecurity-orientedinitiativesrangingfromvariousinvestmentsintechnologytoTheOfficeronTrainprogram,whichprovideslocallawenforcementofficerswiththeopportunitytoridewithtraincrewstoenhancetheirunderstandingofrailroadoperationsandrisks.Ourstaffo

91、finformationsecurityprofessionalscontinuallyassesscybersecurityrisksandimplementmitigationprogramsthatevolvewiththechangingtechnologythreatenvironment.Forexample,wereleasedcriticalpatchestoaddressthevulnerabilityinLog4J,acomponentwidelyusedinourapplicationsandfoundincommercialsoftware.Todate,wehaven

92、otexperiencedanymaterialdisruptionofouroperationsduetoacyberthreatorattackdirectedatus.CooperationwithFederal,State,andLocalGovernmentAgenciesWeworkcloselyonphysicalandcybersecurityinitiativeswithgovernmentagencies,includingtheU.S.DepartmentofTransportation(DOT)theDepartmentofHomelandSecurity(DHS),a

93、longwithitsCybersecurity&InfrastructureSecurityAgency(CISA)andTransportationSecurityAdministration(TSA)aswellaslocalpolicedepartments,firedepartments,andotherfirstresponders.InconnectionwithnewguidancefromtheTSA,effectiveJanuary1,2022,wearerequiredtoreportcyberincidentstoCISA,performacybervulnerabil

94、ityself-assessmentandsubmitresultstotheTSA(byMarch31,2022),assembleandadoptacyberincidentresponseplan(byJune29,2022),andappointcybersecuritycoordinators.InconjunctionwiththeAssociationofAmericanRailroads(AAR),wesponsorAskRail,amobileapplicationthatprovidesfirstresponderswithsecurelinkstoelectronicin

95、formation,includingcommodityandemergencyresponseinformationrequiredbyemergencypersonneltorespondtoaccidentsandothersituations.WealsoparticipateintheNationalJointTerrorismTaskForce,amulti-agencyeffortestablishedbytheU.S.DepartmentofJusticeandtheFederalBureauofInvestigationtocombatandpreventterrorism.

96、7TableofContentsWeworkwiththeCoastGuard,U.S.CustomsandBorderProtection(CBP),andtheMilitaryTransportManagementCommand,whichmonitorshipmentsenteringtheUPRRrailnetworkatU.S.bordercrossingsandports.WewerethefirstrailroadintheU.S.tobenamedapartnerinCBPsCustoms-TradePartnershipAgainstTerrorism,apartnershi

97、pdesignedtodevelop,enhance,andmaintaineffectivesecurityprocessesthroughouttheglobalsupplychain.CooperationwithCustomersandTradeAssociationsThroughTransCAER(TransportationCommunityAwarenessandEmergencyResponse),weworkwiththeAAR,theAmericanChemistryCouncil,theAmericanPetroleumInstitute,andotherchemica

98、ltradegroupstoprovidecommunitieswithpreparednesstools,includingthetrainingofemergencyresponders.IncooperationwiththeFRAandotherinterestedgroups,wearealsoworkingtodevelopadditionalimprovementstotankcardesignthatwillfurtherlimittheriskofreleasesofhazardousmaterials.SustainableFutureUnionPacificbelieve

99、sitisimportantthatweactasenvironmentalstewards,reducingemissionsandsupportingthetransitiontoamoresustainablefuture.Whileweworktofurtherreduceourenvironmentalfootprint,itisimportanttonotethatrailroadsalreadyareoneofthemostfuel-efficientmeansoftransportation.AccordingtotheAssociationofAmericanRailroad

100、s(AAR),movingfreightbyrailinsteadoftruckreducesgreenhousegas(GHG)emissionsbyupto75%.Buildingonrailsrelativeemissionsbenefitsoverothermodesoftransportation,wearetakingadditionalactionstoreduceouremissions.TheseactionsaredescribedinourinitialClimateActionPlan,whichwereleasedinDecember2021.Competitions

101、ee“WeFaceCompetitionfromOtherRailroadsandOtherTransportationProviders”intheRiskFactorsinItem1Aofthisreport.KeySupplierssee“WeAreDependentonCertainKeySuppliersofLocomotivesandRail”intheRiskFactorsinItem1Aofthisreport.AvailableInformationOurI.Wemakeavailablefreeofchargeonourwebsite(underthe“Investors”

102、captionlink)ourAnnualReportsonForm10-KourQuarterlyReportsonForm10-QourcurrentreportsonForm8-KourproxystatementsForms3,4,and5,filedonbehalfofourdirectorsandcertainexecutiveofficersandamendmentstosuchreportsfiledorfurnishedpursuanttotheSecuritiesExchangeActof1934,asamended(theExchangeAct).Weprovidethe

103、sereportsandstatementsassoonasreasonablypracticableaftersuchmaterialiselectronicallyfiledwith,orfurnishedto,theSEC.WealsomakeavailableonourwebsitepreviouslyfiledSECreportsandexhibitsviaalinktoEDGARontheSECsInternetsiteatwww.sec.gov.Additionally,ourcorporategovernancematerials,includingBy-Laws,BoardC

104、ommitteecharters,governanceguidelinesandpolicies,andcodesofconductandethicsfordirectors,officers,andemployeesareavailableonourwebsite.Fromtimetotime,thecorporategovernancematerialsonourwebsitemaybeupdatedasnecessarytocomplywithrulesissuedbytheSECandtheNYSEorasdesirabletopromotetheeffectiveandefficie

105、ntgovernanceofourCompany.Anysecurityholderwishingtoreceive,withoutcharge,acopyofanyofourSECfilingsorcorporategovernancematerialsshouldsendawrittenrequestto:Secretary,UnionPacificCorporation,1400DouglasStreet,Omaha,NE68179.Referencestoourwebsiteaddressinthisreport,includingreferencesinManagementsDisc

106、ussionandAnalysisofFinancialConditionandResultsofOperations,Item7,areprovidedasaconvenienceanddonotconstitute,andshouldnotbedeemed,anincorporationbyreferenceoftheinformationcontainedon,oravailablethrough,thewebsite.Therefore,suchinformationshouldnotbeconsideredpartofthisreport.GOVERNMENTALANDENVIRON

107、MENTALREGULATIONGovernmentalRegulationOuroperationsaresubjecttoavarietyoffederal,state,andlocalregulations,generallyapplicabletoallbusinesses.(SeealsothediscussionofcertainregulatoryproceedingsinLegalProceedings,Item3.)TheoperationsoftheRailroadaresubjecttotheregulationsoftheFRAandotherfederalandsta

108、teagenciesaswellastheregulatoryjurisdictionoftheSurfaceTransportationBoard(STB).TheSTBhasjurisdictionoverrateschargedoncertainregulatedrailtrafficcommoncarrierserviceofregulatedtrafficfreightcarcompensationtransfer,extension,orabandonmentofraillinesandacquisitionofcontrolofrailcommoncarriers.TheSTBc

109、ontinuesitseffortstoexploreexpandingrailregulationandisreviewingproposedrulemakinginvariousareas,includingreciprocalswitching,commodityexemptions,andexpandingandeasingproceduresforsmallerratecomplaints.TheSTBalsocontinuestoexplorechangestothemethodologyfordeterminingrailroadrevenueadequacyandtheposs

110、ibleusesofrevenueadequacyinregulatingrailroadrates.TheSTBpostsquarterlyreportsonratereasonablenesscases,maintainsadatabaseonservicecomplaints,andhastheauthoritytoinitiateinvestigations,amongotherthings.DOT,theOccupationalSafetyandHealthAdministration,thePipelineandHazardousMaterialsSafetyAdministrat

111、ion,andDHS,alongwithotherfederalagencies,havejurisdictionovercertainaspectsofsafety,movementofhazardousmaterialsandhazardouswaste,emissionsrequirements,andequipmentstandards.Additionally,variousstateandlocalagencieshavejurisdictionoverdisposalofhazardouswasteandseektoregulatemovementofhazardousmater

112、ialsinwaysnotpreemptedbyfederallaw.EnvironmentalRegulationWearesubjecttoextensivefederalandstateenvironmentalstatutesandregulationspertainingtopublichealthandtheenvironment.ThestatutesandregulationsareadministeredandmonitoredbytheEnvironmentalProtectionAgency(EPA)andbyvariousstateenvironmentalagenci

113、es.TheprimarylawsaffectingouroperationsaretheResourceConservationandRecoveryAct,regulatingthemanagementanddisposalofsolidandhazardouswastestheComprehensiveEnvironmentalResponse,Compensation,andLiabilityAct,regulatingthecleanupofcontaminatedpropertiestheCleanAirAct,regulatingairemissionsandtheCleanWa

114、terAct,regulatingwastewaterdischarges.InformationconcerningenvironmentalclaimsandcontingenciesandestimatedremediationcostsissetforthinManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperationsCriticalAccountingEstimatesEnvironmental,Item7,andNote17totheFinancialStatementsandSupplemen

115、taryData,Item8.8TableofContentsItem1A.RiskFactorsThefollowingdiscussionaddressessignificantfactors,events,anduncertaintiesthatmakeaninvestmentinoursecuritiesriskyandprovidesimportantinformationfortheunderstandingofour“forward-lookingstatements,”whicharediscussedimmediatelyprecedingItem7AofthisForm10

116、-Kandelsewhere.TheriskfactorssetforthinthisItem1Ashouldbereadinconjunctionwiththerestoftheinformationincludedinthisreport,includingManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations,Item7,andFinancialStatementsandSupplementaryData,Item8.Weurgeyoutoconsidercarefullythefactorsd

117、escribedbelowandtherisksthattheypresentforouroperationsaswellastherisksaddressedinotherreportsandmaterialsthatwefilewiththeSECandtheotherinformationincludedorincorporatedbyreferenceinthisForm10-K.Whenthefactors,events,andcontingenciesdescribedbeloworelsewhereinthisForm10-Kmaterialize,ourbusiness,rep

118、utation,financialcondition,resultsofoperations,cashflows,orprospectscanbemateriallyadverselyaffected.Insuchcase,thetradingpriceofourcommonstockcoulddeclineandyoucouldlosepartorallofyourinvestment.Additionalrisksanduncertaintiesnotcurrentlyknowntousorthatwecurrentlydeemimmaterialmayalsomateriallyadve

119、rselyaffectourbusiness,reputation,financialcondition,resultsofoperations,cashflows,andprospects.StrategicandOperationalRisksWeMustManageFluctuatingDemandforOurServicesandNetworkCapacitySignificantreductionsindemandforrailserviceswithrespecttooneormorecommoditiesorchangesinconsumerpreferencesthataffe

120、ctthebusinessesofourcustomerscanleadtoincreasedcostsassociatedwithresizingouroperations,includinghigherunitoperatingcostsandcostsforthestorageoflocomotives,railcars,andotherequipmentwork-forceadjustmentsandotherrelatedactivities,whichcouldhaveamaterialadverseeffectonourresultsofoperations,financialc

121、ondition,andliquidity.Ifthereissignificantdemandforourservicesthatexceedsthedesignedcapacityofournetwork,wemayexperiencenetworkdifficulties,includingcongestionandreducedvelocity,thatcouldcompromisethelevelofserviceweprovidetoourcustomers.Thislevelofdemandmayalsocompoundtheimpactofweatherandweather-r

122、elatedeventsonouroperationsandvelocity.Althoughwecontinuetoimproveourtransportationplan,addcapacity,improveoperationsatouryardsandotherfacilities,andimproveourabilitytoaddresssurgesindemandforanyreasonwithadequateresources,wecannotbesurethatthesemeasureswillfullyoradequatelyaddressanyserviceshortcom

123、ingsresultingfromdemandexceedingourplannedcapacity.Wemayexperienceotheroperationalorservicedifficultiesrelatedtonetworkcapacity,dramaticandunplannedfluctuationsinourcustomersdemandforrailservicewithrespecttooneormorecommoditiesoroperatingregions,orothereventsthatcouldnegativelyimpactouroperationalef

124、ficiency,whichcouldallhaveamaterialadverseeffectonourresultsofoperations,financialcondition,andliquidity.WeTransportHazardousMaterialsWetransportcertainhazardousmaterialsandothermaterials,includingcrudeoil,ethanol,andtoxicinhalationhazard(TIH)materials,suchaschlorine,thatposecertainrisksintheeventof

125、areleaseorcombustion.Additionally,U.S.lawsimposecommoncarrierobligationsonrailroadsthatrequireustotransportcertainhazardousmaterialsregardlessofriskorpotentialexposuretoloss.Arailaccidentorotherincidentoraccidentonournetwork,atourfacilities,oratthefacilitiesofourcustomersinvolvingthereleaseorcombust

126、ionofhazardousmaterialscouldinvolvesignificantcostsandclaimsforpersonalinjury,propertydamage,andenvironmentalpenaltiesandremediationinexcessofourinsurancecoveragefortheserisks,whichcouldhaveamaterialadverseeffectonourresultsofoperations,financialcondition,andliquidity.WeRelyonTechnologyandTechnology

127、ImprovementsinOurBusinessOperationsWerelyoninformationtechnologyinallaspectsofourbusiness,includingtechnologysystemsoperatedbyusorundercontrolofthird-parties.Ifwedonothavesufficientcapitalordonotdeploysufficientcapitalinatimelymannertoacquire,develop,orimplementnewtechnologyormaintainorupgradecurren

128、tsystems,suchasPositiveTrainControl(PTC)orthelatestversionofourtransportationcontrolsystems,wemaysufferacompetitivedisadvantagewithintherailindustryandwithcompaniesprovidingothermodesoftransportationservice,whichcouldhaveamaterialadverseeffectonourresultsofoperations,financialcondition,andliquidity.

129、WeAreSubjecttoCybersecurityRisksWerelyoninformationtechnologyinallaspectsofourbusiness,includingtechnologysystemsoperatedbyus(whethercreatedbyusorpurchased),undercontrolofthird-parties,oropen-sourcesoftware.Althoughwedevotesignificantresourcestoprotectourtechnologysystemsandproprietarydata,wehaveexp

130、eriencedandwilllikelycontinuetoexperiencevaryingdegreesofcyberincidentsinthenormalcourseofbusiness.Therecanbenoassurancethatthesystemswehavedesignedtopreventorlimittheeffectsofcyberincidentsorattackswillbesufficienttopreventordetectsuchincidentsorattacks,ortoavoidamaterialadverseimpactonoursystemsaf

131、tersuchincidentsorattacksdooccur.Furthermore,duetotherisingnumbersandincreasingsophisticationofcyber-attacks,anincreasinglycomplexinformationtechnologysupplychain,andthenatureofzero-dayexploits,wemaybeunabletoanticipateorimplementadequatepreventativemeasurestopreventasecuritybreach,includingbyransom

132、ware,humanerror,orothercyber-attackmethods,frommateriallydisruptingoursystemsorthesystemsofthird-parties.Asuccessfulcyber-attackmayresultinsignificantserviceinterruptionsafetyfailureotheroperationaldifficultiesunauthorizedaccessto(orthelossofaccessto)competitivelysensitive,confidential,orothercritic

133、aldataorsystemslossofcustomersfinanciallossesregulatoryfinesandmisuseorcorruptionofcriticaldataandproprietaryinformation,whichcouldallhaveamaterialadverseimpactonourresultsofoperations,financialcondition,andliquidity.Wemayexperiencesecuritybreachesthatcouldremainundetectedforanextendedperiodand,ther

134、efore,haveagreaterimpactontheservicesweoffer.Additionally,wemaybeexposedtoincreasedcybersecurityriskbecauseweareacomponentofthecriticalU.S.infrastructure.SevereWeatherCouldResultinSignificantBusinessInterruptionsandExpendituresAsarailroadwithavastnetwork,weareexposedtosevereweatherconditionsandother

135、naturalphenomena,includingearthquakes,hurricanes,fires,floods,mudslidesorlandslides,extremetemperatures,avalanches,andsignificantprecipitation.Lineoutagesandotherinterruptionscausedbytheseconditionscanadverselyaffectourentirerailnetwork,potentiallynegativelyaffectingrevenue,costs,andliabilities,desp

136、iteeffortsweundertaketoplanfortheseevents.Ourrevenuescanalsobeadverselyaffectedbysevereweatherthatcausesdamageanddisruptionstoourcustomers.Theseimpactscausedbysevereweathercouldhaveamaterialadverseeffectonourresultsofoperations,financialcondition,andliquidity.9TableofContentsASignificantPortionofOur

137、RevenueInvolvesTransportationofCommoditiestoandfromInternationalMarketsAlthoughrevenuesfromouroperationsareattributabletotransportationservicesprovidedintheU.S.,asignificantportionofourrevenuesinvolvesthetransportationofcommoditiestoandfrominternationalmarkets,includingMexico,Canada,andSoutheastAsia

138、,byvariouscarriersand,attimes,variousmodesoftransportation.SignificantandsustainedinterruptionsoftradewithMexico,Canada,orcountriesinSoutheastAsia,includingChina,couldadverselyaffectcustomersandotherentitiesthat,directlyorindirectly,purchaseorrelyonrailtransportationservicesintheU.S.aspartoftheirope

139、rations,andanysuchinterruptionscouldhaveamaterialadverseeffectonourresultsofoperations,financialcondition,andliquidity.AnyoneormoreofthefollowingcouldcauseasignificantandsustainedinterruptionoftradewithMexico,Canada,orcountriesinSoutheastAsia:(a)adeteriorationofsecurityforinternationaltradeandbusine

140、sses(b)theadverseimpactofnewlaws,rules,andregulationsortheinterpretationoflaws,rules,andregulationsbygovernmententities,courts,orregulatorybodies,includingtheUnitedStates-Mexico-CanadaAgreement(USMCA)anda“PhaseOne”tradeagreementwithChina(c)actionsoftaxingauthoritiesthataffectourcustomersdoingbusines

141、sinforeigncountries(d)anysignificantadverseeconomicdevelopments,suchasextendedperiodsofhighinflation,materialdisruptionsinthebankingsectororinthecapitalmarketsoftheseforeigncountries,andsignificantchangesinthevaluationofthecurrenciesoftheseforeigncountriesthatcouldmateriallyaffectthecostorvalueofimp

142、ortsorexports(e)shiftsinpatternsofinternationaltradethatadverselyaffectimportandexportmarkets(f)amaterialreductioninforeigndirectinvestmentinthesecountriesand(g)publichealthcrises,includingtheoutbreakofpandemicorcontagiousdisease,suchasthecoronavirusanditsvariantstrains(COVID).WeAreDependentonCertai

143、nKeySuppliersofLocomotivesandRailDuetothecapital-intensivenatureandsophisticationoflocomotiveequipment,parts,andmaintenance,potentialnewsuppliersfacehighbarrierstoentry.Therefore,ifoneofthedomesticsuppliersofhighhorsepowerlocomotivesdiscontinuesmanufacturinglocomotives,supplyingparts,orprovidingmain

144、tenanceforanyreason,includingbankruptcyorinsolvencyortheinabilitytomanufacturelocomotivesthatmeetefficiencyorregulatoryemissionsstandards,wecouldexperiencesignificantcostincreasesandreducedavailabilityofthelocomotivesthatarenecessaryforouroperations.Additionally,weutilizealimitednumberofsteelproduce

145、rsthatmeetourspecifications.Railiscriticaltoouroperationsforrailreplacementprograms,maintenance,andforaddingadditionalnetworkcapacity,newrailandstorageyards,andexpansionsofexistingfacilities.Thisindustrysimilarlyhashighbarrierstoentry,andifoneofthesesuppliersdiscontinuesoperationsforanyreason,includ

146、ingbankruptcyorinsolvency,wecouldexperiencebothsignificantcostincreasesforrailpurchasesanddifficultyobtainingsufficientrailformaintenanceandotherprojects.ChangestotradeagreementsorpoliciesthatresultinincreasedtariffsongoodsimportedintotheUnitedStatescouldalsoresultinsignificantcostincreasesforrailpu

147、rchasesanddifficultyobtainingsufficientrail.HumanCapitalRisksStrikesorWorkStoppagesCouldAdverselyAffectOurOperationsTheU.S.ClassIrailroadsarepartytocollectivebargainingagreementswithvariouslaborunions.Themajorityofouremployeesbelongtolaborunionsandaresubjecttotheseagreements.Disputesoverthetermsofth

148、eseagreementsorourpotentialinabilitytonegotiateacceptablecontractswiththeseunionscouldresultin,amongotherthings,strikes,workstoppages,slowdowns,orlockouts,whichcouldcauseasignificantdisruptionofouroperationsandhaveamaterialadverseeffectonourresultsofoperations,financialcondition,andliquidity.Additio

149、nally,futurenationallaboragreements,orrenegotiationoflaboragreementsorprovisionsoflaboragreements,couldcompromiseourservicereliabilityorsignificantlyincreaseourcostsforhealthcare,wages,andotherbenefits,whichcouldhaveamaterialadverseimpactonourresultsofoperations,financialcondition,andliquidity.Labor

150、disputes,workstoppages,slowdowns,orlockoutsatloading/unloadingfacilities,ports,orothertransportaccesspointscouldcompromiseourservicereliabilityandhaveamaterialadverseimpactonourresultsofoperations,financialcondition,andliquidity.Labordisputes,workstoppages,slowdowns,orlockoutsbyemployeesofourcustome

151、rsoroursupplierscouldcompromiseourservicereliabilityandhaveamaterialadverseimpactonourresultsofoperations,financialcondition,andliquidity.TheAvailabilityofQualifiedPersonnelCouldAdverselyAffectOurOperationsChangesindemographics,trainingrequirements,andtheavailabilityofqualifiedpersonnelforus,ourcust

152、omers,andthroughoutthesupplychain,includingtheeffectsonavailabilityfrompandemicillnessesorrestrictions(including,forexample,anypotentialeffectsfromthecoronavirusvaccinemandates),couldnegativelyaffectourabilitytomeetdemandforrailservice.Unpredictableincreasesindemandforrailservicesandalackofnetworkfl

153、uiditymayexacerbatesuchrisks,whichcouldhaveanegativeimpactonouroperationalefficiencyandotherwisehaveamaterialadverseeffectonourresultsofoperations,financialcondition,andliquidity.LegalandRegulatoryRisksWeAreSubjecttoSignificantGovernmentalRegulationWearesubjecttogovernmentalregulationbyasignificantn

154、umberoffederal,state,andlocalauthoritiescoveringavarietyofhealth,safety,labor,environmental,economic(asdiscussedbelow),tax,andothermatters.Manylawsandregulationsrequireustoobtainandmaintainvariouslicenses,permits,andotherauthorizations,andwecannotguaranteethatwewillcontinuetobeabletodoso.Ourfailuret

155、ocomplywithapplicablelawsandregulationscouldhaveamaterialadverseeffectonus.Governmentsorregulatorsmaychangethelegislativeorregulatoryframeworksthatweoperateinwithoutprovidingusanyrecoursetoaddressanyadverseeffectsonourbusiness,including,withoutlimitation,regulatorydeterminationsorrulesregardingdispu

156、teresolution,increasingtheamountofourtrafficsubjecttocommoncarrierregulation,businessrelationshipswithotherrailroads,calculationofourcostofcapitalorotherinputsrelevanttocomputingourrevenueadequacy,thepriceswecharge,changesintaxrates,enactmentofnewtaxlaws,andrevisionintaxregulations.Significantlegisl

157、ativeactivityinCongressorregulatoryactivitybytheSTBcouldexpandregulationofrailroadoperationsandpricingforrailservices,whichcouldreducecapitalspendingonourrailnetwork,facilities,andequipment,andhaveamaterialadverseeffectonourresultsofoperations,financialcondition,andliquidity.WeMayBeSubjecttoVariousC

158、laimsandLawsuitsThatCouldResultinSignificantExpendituresAsarailroadwithoperationsindenselypopulatedurbanareasandavastrailnetwork,weareexposedtothepotentialforvariousclaimsandlitigationrelatedtolaborandemployment,personalinjury,propertydamage,environmentalliability,andothermatters.Anymaterialchangest

159、olitigationtrendsoracatastrophicrailaccidentorseriesofaccidentsinvolvinganyorallofpropertydamage,personalinjury,andenvironmentalliabilitythatexceedourinsurancecoverageforsuchriskscouldhaveamaterialadverseeffectonourresultsofoperations,financialcondition,andliquidity.10TableofContentsWeAreSubjecttoSi

160、gnificantEnvironmentalLawsandRegulationsDuetothenatureoftherailroadbusiness,ouroperationsaresubjecttoextensivefederal,state,andlocalenvironmentallawsandregulationsconcerning,amongotherthings,emissionstotheairdischargestowatershandling,storage,transportation,anddisposalofwasteandothermaterialsandhaza

161、rdousmaterialorpetroleumreleases.Wegenerateandtransporthazardousandnon-hazardouswasteinouroperations.Environmentalliabilitycanextendtopreviouslyownedoroperatedproperties,leasedproperties,propertiesownedbythird-parties,aswellaspropertieswecurrentlyown.Environmentalliabilitieshavearisenandmayalsoarise

162、fromclaimsassertedbyadjacentlandownersorotherthird-partiesintoxictortlitigation.Wehavebeenandmaybesubjecttoallegationsorfindingsthatwehaveviolated,orarestrictlyliableunder,theselawsorregulations.Wecurrentlyhavecertainobligationsatexistingsitesforinvestigation,remediation,andmonitoring,andwelikelywil

163、lhaveobligationsatothersitesinthefuture.Liabilitiesfortheseobligationsaffectourestimatebasedonourexperienceand,asnecessary,theadviceandassistanceofourconsultants.However,actualcostsmayvaryfromourestimatesduetoanyorallofseveralfactors,includingchangestoenvironmentallawsorinterpretationsofsuchlaws,tec

164、hnologicalchangesaffectinginvestigationsandremediation,theparticipationandfinancialviabilityofotherpartiesresponsibleforanysuchliability,andthecorrectiveactionorchangetocorrectiveactionsrequiredtoremediateanyexistingorfuturesites.Wecouldincursignificantcostsasaresultofanyoftheforegoing,andwemaybereq

165、uiredtoincursignificantexpensestoinvestigateandremediateknown,unknown,orfutureenvironmentalcontamination,whichcouldhaveamaterialadverseeffectonourresultsofoperations,financialcondition,andliquidity.MacroeconomicandIndustryRisksWeFaceCompetitionfromOtherRailroadsandOtherTransportationProvidersWefacec

166、ompetitionfromotherrailroads,motorcarriers,ships,barges,andpipelines.OurmainrailroadcompetitorisBurlingtonNorthernSantaFeLLC.Itsprimarysubsidiary,BNSFRailwayCompany(BNSF),operatesparallelroutesinmanyofourmaintrafficcorridors.Inaddition,weoperateincorridorsservedbyotherrailroadsandmotorcarriers.Motor

167、carriercompetitionexistsforallthreeofourcommoditygroups(excludingmostcoalshipments).BecauseoftheproximityofourroutestomajorinlandandGulfCoastwaterways,bargescanbeparticularlycompetitive,especiallyforgrainandbulkcommoditiesincertainareaswhereweoperate.Inadditiontopricecompetition,wefacecompetitionwit

168、hrespecttotransittimes,quality,andreliabilityofservicefrommotorcarriersandotherrailroads.Motorcarriersinparticularcanhaveanadvantageoverrailroadswithrespecttotransittimesandtimelinessofservice.However,railroadsaremuchmorefuel-efficientthantrucks,whichreducestheimpactoftransportinggoodsontheenvironme

169、ntandpublicinfrastructure,andwehavebeenmakingeffortstoconverttrucktraffictorail.Additionally,wemustbuildoracquireandmaintainourrailsystem,whiletrucks,barges,andmaritimeoperatorsareabletousepublicrights-of-waymaintainedbypublicentities.Anyofthefollowingcouldalsoaffectthecompetitivenessofourtransporta

170、tionservicesforsomeorallofourcommodities,whichcouldhaveamaterialadverseeffectonourresultsofoperations,financialcondition,andliquidity:(i)improvementsorexpendituresmateriallyincreasingthequalityorreducingthecostsofthesealternativemodesoftransportation,suchasautonomousormorefuelefficienttrucks,(ii)leg

171、islationthateliminatesorsignificantlyincreasesthesizeorweightlimitationsappliedtomotorcarriers,or(iii)legislationorregulatorychangesthatimposeoperatingrestrictionsonrailroadsorthatadverselyaffecttheprofitabilityofsomeorallrailroadtraffic.Manymovementsfaceproductorgeographiccompetitionwhereourcustome

172、rscanusedifferentproducts(e.g.,naturalgasinsteadofcoal,sorghuminsteadofcorn)orcommoditiesfromdifferentlocations(e.g.,grainfromstatesorcountriesthatwedonotserve,crudeoilfromdifferentregions).Sourcingdifferentcommoditiesordifferentlocationsallowsshipperstosubstitutedifferentcarriersandsuchcompetitionm

173、ayreduceourvolumeorconstrainprices.Additionally,anyfutureconsolidationoftherailindustrycouldmateriallyaffectourcompetitiveenvironment.WeMayBeAffectedbyClimateChangeandMarketorRegulatoryResponsestoClimateChangeClimatechange,includingtheimpactofglobalwarming,couldhaveamaterialadverseeffectonourresults

174、ofoperations,financialcondition,andliquidity.Restrictions,caps,taxes,orothercontrolsonemissionsofGHGs,includingdieselexhaust,couldsignificantlyincreaseouroperatingcosts.Restrictionsonemissionscouldalsoaffectourcustomersthat(a)usecommoditiesthatwecarrytoproduceenergy,(b)usesignificantamountsofenergyi

175、nproducingordeliveringthecommoditieswecarry,or(c)manufactureorproducegoodsthatconsumesignificantamountsofenergyorburnfossilfuels,includingchemicalproducers,farmersandfoodproducers,andautomakersandothermanufacturers.Significantcostincreases,governmentregulation,orchangesofconsumerpreferencesforgoodso

176、rservicesrelatingtoalternativesourcesofenergy,emissionsreductions,andGHGemissionscouldmateriallyaffectthemarketsforthecommoditieswecarryanddemandforourservices,whichinturncouldhaveamaterialadverseeffectonourresultsofoperations,financialcondition,andliquidity.Governmentincentivesencouragingtheuseofal

177、ternativesourcesofenergyalsocouldaffectcertainofourcustomersandthemarketsforcertainofthecommoditieswecarryinanunpredictablemannerthatcouldalterourtrafficpatterns,including,forexample,increasingroyaltieschargedtoproducersofPRBcoalbytheU.S.DepartmentofInteriorandtheimpactsofethanolincentivesonfarminga

178、ndethanolproducers.Wecouldfaceincreasedcostsrelatedtodefendingandresolvinglegalclaimsandotherlitigationrelatedtoclimatechangeandtheallegedimpactofouroperationsonclimatechange.Violentweathercausedbyclimatechange,includingearthquakes,hurricanes,fires,floods,extremetemperatures,avalanches,andsignifican

179、tprecipitationcouldcauselineoutagesandotherinterruptionstoourinfrastructure.Anyofthesefactors,individuallyorinoperationwithoneormoreoftheotherfactors,orotherunforeseenimpactsofclimatechangecouldreducetheamountoftrafficwehandleandhaveamaterialadverseeffectonourresultsofoperations,financialcondition,a

180、ndliquidity.WhileweworktoimplementourClimateActionPlan,oureffortstoachieveemissionreductiontargetscouldsignificantlyincreaseouroperationalcostsandcapitalexpenditures.11TableofContentsOurbusiness,financialcondition,andresultsofoperationshavebeenadverselyaffected,andinthefuture,couldbemateriallyadvers

181、elyaffectedbypandemicsorotherpublichealthcrisesOurbusiness,financialcondition,andresultsofoperationshavebeenadverselyaffectedbyCOVID.COVIDhascaused,andisexpectedtocontinuetocause,aglobalslowdownofeconomicactivity(includingthedecreaseindemandforabroadvarietyofgoods),disruptionsinglobalsupplychains,an

182、dsignificantvolatilityanddisruptionoffinancialmarkets,resultingfurtherinadverseeffectsonworkforces,customers,andregionalandlocaleconomies.Otherfuturepandemicsorpublichealthcrisesmaycausethesesameorsimilarconsequences.Becausetheseverity,magnitude,anddurationoftheCOVIDpandemicanditseconomicconsequence

183、sarerapidlychanging,anddifficulttopredict,theimpactonourbusinessandfinancialconditionremainsuncertain.TheultimateimpactoftheCOVIDpandemiconourresultsofoperationsandfinancialconditionremainsuncertainanddependsonnumerousevolvingfactors,whichwemaynotbeabletoeffectivelyrespondtoandarenotentirelywithinou

184、rcontrol.Thesefactorsalsomaybeofimportanceforotherpandemicsorpublichealthcrises,including,butnotlimitedto:governmental,business,andindividualsactionsthathavebeenandcontinuetobetakeninresponsetoaglobalpandemicorotherpublichealthcrises(includingrestrictionsontravelandtransport,workforcepressures,socia

185、ldistancing,andshelter-in-placeorders)theeffectofapandemicorotherpublichealthcrisesoneconomicactivityandactionstakeninresponsetheeffectonourcustomersandtheirdemandforourservicestheeffectofapandemicorotherpublichealthcrisesonthecredit-worthinessofourcustomersnationalorglobalsupplychainchallengesordis

186、ruptionfacilityclosurescommoditycostvolatilitygeneraleconomicuncertaintyinkeyglobalmarketsandfinancialmarketvolatilityglobaleconomicconditionsandlevelsofeconomicgrowthandthepaceofrecoveryasthepandemicsubsidesaswellasresponsetoapotentialreoccurrence.Further,apandemicorotherpublichealthcrises,andthevo

187、latileregionalandglobaleconomicconditionsstemmingfromsuchanevent,couldalsoprecipitateandaggravatetheotherriskfactorsthatweidentify,whichcouldmateriallyadverselyaffectourbusiness,financialcondition,resultsofoperations(includingrevenuesandprofitability),and/orstockprice.Additionally,apandemicorotherpu

188、blichealthcrisesalsomayaffectouroperatingandfinancialresultsinamannerthatisnotpresentlyknowntousorthatwecurrentlydonotconsidertopresentsignificantriskstoouroperations.FinancialRisksWeAreAffectedByFluctuatingFuelPricesFuelcostsconstituteasignificantportionofourtransportationexpenses.Dieselfuelpricesc

189、anbesubjecttodramaticfluctuations,andsignificantpriceincreasescouldhaveamaterialadverseeffectonouroperatingresults.Althoughwecurrentlyareabletorecoverasignificantamountofourfuelexpensesfromourcustomersthroughrevenuefromfuelsurcharges,wecannotbecertainthatwewillalwaysbeabletomitigaterisingorelevatedf

190、uelcoststhroughourfuelsurcharges.Additionally,futuremarketconditionsorlegislativeorregulatoryactivitiescouldadverselyaffectourabilitytoapplyfuelsurchargesoradequatelyrecoverincreasedfuelcoststhroughfuelsurcharges.Asfuelpricesfluctuate,ourfuelsurchargeprogramstrailsuchfluctuationsinfuelpricebyapproxi

191、matelytwomonths,andmaybeasignificantsourceofquarter-over-quarterandyear-over-yearvolatility,particularlyinperiodsofrapidlychangingprices.International,political,andeconomicfactors,eventsandconditionsaffectthevolatilityoffuelpricesandsupplies.Weathercanalsoaffectfuelsuppliesandlimitdomesticrefiningca

192、pacity.Asevereshortageof,ordisruptionto,domesticfuelsuppliescouldhaveamaterialadverseeffectonourresultsofoperations,financialcondition,andliquidity.Alternatively,lowerfuelpricescouldhaveapositiveimpactontheeconomybyincreasingconsumerdiscretionaryspendingthatpotentiallycouldincreasedemandforvariousco

193、nsumerproductswetransport.However,lowerfuelpricescouldhaveanegativeimpactonothercommoditieswetransport,suchascoalanddomesticdrilling-relatedshipments,whichcouldhaveamaterialadverseeffectonourresultsofoperations,financialcondition,andliquidity.WeRelyonCapitalMarketsDuetothesignificantcapitalexpenditu

194、resrequiredtooperateandmaintainasafeandefficientrailroad,werelyonthecapitalmarketstoprovidesomeofourcapitalrequirements.Weutilizelong-termdebtinstruments,bankfinancing,andcommercialpaper,andwepledgecertainamountofourreceivablesascollateralforcredit.Significantinstabilityordisruptionsofthecapitalmark

195、ets,includingthecreditmarkets,ordeteriorationofourfinancialconditionduetointernalorexternalfactorscouldrestrictorprohibitouraccessto,andsignificantlyincreasethecostof,commercialpaperandotherfinancingsources,includingbankcreditfacilitiesandtheissuanceoflong-termdebt,includingcorporatebonds.Asignifica

196、ntdeteriorationofourfinancialconditioncouldresultinareductionofourcreditratingtobelowinvestmentgrade,whichcouldrestrictor,atcertaincreditlevelsbelowinvestmentgrade,mayprohibitusfromutilizingourcurrentreceivablessecuritizationfacility(ReceivablesFacility).Thismayalsolimitouraccesstoexternalsourcesofc

197、apitalandsignificantlyincreasethecostsofshortandlong-termdebtfinancing.GeneralRiskFactorsWeAreAffectedbyGeneralEconomicConditionsProlonged,severeadversedomesticandglobaleconomicconditionsordisruptionsoffinancialandcreditmarkets,includinginflation,mayaffecttheproducersandconsumersofthecommoditiesweca

198、rryandmayhaveamaterialadverseeffectonouraccesstoliquidity,resultsofoperations,andfinancialcondition.WeMayBeAffectedbyActsofTerrorism,War,orRiskofWarOurraillines,facilities,andequipment,includingrailcarscarryinghazardousmaterials,couldbedirecttargetsorindirectcasualtiesofterroristattacks.Terroristatt

199、acks,orothersimilarevents,anygovernmentresponsethereto,andwarorriskofwarmayadverselyaffectourresultsofoperations,financialcondition,andliquidity.Inaddition,insurancepremiumsforsomeorallofourcurrentcoveragescouldincreasedramatically,orcertaincoveragesmaynotbeavailabletousinthefuture.Item1B.Unresolved

200、StaffCommentsNone.12TableofContentsItem2.PropertiesWeemployavarietyofassetsinthemanagementandoperationofourrailbusiness.Ourrailnetworkcovers23statesinthewesterntwo-thirdsoftheU.S.TRACKOurrailnetworkincludes32,452routemiles.Weown26,124milesandoperateontheremainderpursuanttotrackagerightsorleases.Thef

201、ollowingtabledescribestrackmilesatDecember31,2021and2020:2021 2020Route 32,452 32,313Othermainline 7,093 7,097Passinglinesandturnouts 3,412 3,382Switchingandclassificationyardlines 8,887 9,001Totalmiles 51,844 51,793HEADQUARTERSBUILDINGWeownourheadquartersbuildinginOmaha,Nebraska.Thefacilityhas1.2mi

202、llionsquarefeetofspacethatcanaccommodateapproximately4,000employees.HARRIMANDISPATCHINGCENTERTheHarrimanDispatchingCenter(HDC),locatedinOmaha,Nebraska,isourprimarydispatchingfacility.Itislinkedtoregionaldispatchingandlocomotivemanagementfacilitiesatvariouslocationsalongournetwork.HDCemployeescoordin

203、atemovesoflocomotivesandtrains,managetrafficandtraincrewsonournetwork,andcoordinateinterchangeswithotherrailroads.Morethan500employeescurrentlyworkon-siteinthefacility.IntheeventofadisruptionofoperationsatHDCduetoacyber-attack,floodingorsevereweather,pandemicoutbreak,orotherevent,wemaintainthecapabi

204、litytoconductcriticaloperationsatback-upfacilitiesindifferentlocations.13TableofContentsRAILFACILITIESInadditiontoourtrackstructure,weoperatenumerousfacilities,includingterminalsforintermodalandotherfreightrailyardsforbuildingtrains(classificationyards),switching,storage-in-transit(thetemporarystora

205、geofcustomergoodsinrailcarspriortoshipment),andotheractivitiesofficestoadministerandmanageouroperationsdispatchingcenterstodirecttrafficonourrailnetworkcrewondutylocationsfortraincrewsalongournetworkandshopsandotherfacilitiesforfueling,maintenance,andrepairoflocomotivesandrepairandmaintenanceofrailc

206、arsandotherequipment.Thefollowingtableincludesthemajoryardsandterminalsonoursystem:MajorClassificationYardsMajorIntermodalTerminalsNorthPlatte,NebraskaJoliet(Global4),IllinoisNorthLittleRock,ArkansasGlobalII(Chicago),IllinoisEnglewood(Houston),TexasEastLosAngeles,CaliforniaLivonia,LouisianaLathrop,C

207、aliforniaWestColton,CaliforniaLATC(LosAngeles),CaliforniaFortWorth,TexasMesquite,TexasHouston,TexasCityofIndustry,CaliforniaRoseville,CaliforniaICTF(LosAngeles),CaliforniaRAILEQUIPMENTOurequipmentincludesownedandleasedlocomotivesandrailcarsheavymaintenanceequipmentandmachineryotherequipmentandtoolsi

208、nourshops,offices,andfacilitiesandvehiclesformaintenance,transportationofcrews,andotheractivities.AsofDecember31,2021,weownedorleasedthefollowingunitsofequipment:AverageLocomotivesOwned Leased Total Age(yrs.)Multiplepurpose 6,204 1,038 7,242 22.5Switching 158 -158 41.4Other 15 61 76 41.3Totallocomot

209、ives 6,377 1,099 7,476 N/A AverageFreightcarsOwned Leased Total Age(yrs.)Coveredhoppers 12,992 7,996 20,988 22.4Openhoppers 5,108 817 5,925 34.8Gondolas 5,468 2,671 8,139 28.8Boxcars 2,210 6,604 8,814 40.6Refrigeratedcars 1,974 2,081 4,055 22.6Flatcars 2,260 1,139 3,399 32.3Other-263 263 33.2Totalfr

210、eightcars 30,012 21,571 51,583 N/A AverageHighwayrevenueequipmentOwned Leased Total Age(yrs.)Containers 48,962 1,856 50,818 10.5Chassis 29,875 14,148 44,023 12.6Totalhighwayrevenueequipment 78,837 16,004 94,841 N/AWecontinuouslyassessourneedforequipmenttorunanefficientandreliablenetwork.Manyfactorsc

211、auseustoadjustthesizeofouractivefleets,includingchangesincarloadvolume,weatherevents,seasonality,customerpreferences,andoperationalefficiencyinitiatives.Assomeofthesefactorsaredifficulttoassessorcanchangerapidly,wemaintainasurgefleettoremainagile.Withoutthesurgefleet,ourabilitytoreactquicklyishinder

212、edasequipmentsuppliersarelimitedandleadtimestoacquireequipmentarelongandmaybeinexcessofayear.Webelieveourlocomotiveandfreightcarfleetsareappropriatelysizedtomeetourcurrentandfuturebusinessrequirements.Thesefleetsserveasthemostreliableandefficientequipmenttofacilitategrowthwithoutadditionalacquisitio

213、ns.LocomotiveandfreightcarinserviceutilizationpercentagesfortheyearendedDecember31,2021,were62%and80%,respectively.14TableofContentsCAPITALEXPENDITURESOurrailnetworkrequiressignificantannualcapitalinvestmentsforreplacement,improvement,andexpansion.Theseinvestmentsenhancesafety,supportthetransportati

214、onneedsofourcustomers,improveouroperationalefficiency,andsupportemissionreductioninitiativesoutlinedinourClimateActionPlan.Additionally,weaddnewequipmenttoourfleettoreplaceolderequipmentandtosupportgrowthandcustomerdemand.2021CapitalProgramDuring2021,ourcapitalprogramtotaledapproximately$3.0billion.

215、(SeethecashcapitalinvestmentstableinManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperationsLiquidityandCapitalResources,Item7,ofthisreport.)2022CapitalPlanIn2022,weexpectourcapitalplantobeapproximately$3.3billion,up10%from2021.(Seefurtherdiscussionofour2022capitalplaninManagements

216、DiscussionandAnalysisofFinancialConditionandResultsofOperationsLiquidityandCapitalResources,Item7,ofthisreport.)OTHEREquipmentEncumbrancesEquipmentwithacarryingvalueofapproximately$1.2billionand$1.3billionatDecember31,2021and2020,respectively,servedascollateralforfinanceleasesandothertypesofequipmen

217、tobligationsinaccordancewiththesecuredfinancingarrangementsutilizedtoacquireorrefinancesuchrailroadequipment.EnvironmentalMattersCertainofourpropertiesaresubjecttofederal,state,andlocallawsandregulationsgoverningtheprotectionoftheenvironment.(SeediscussionwithinthisreportofenvironmentalissuesinBusin

218、essGovernmentalandEnvironmentalRegulation,Item1ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperationsCriticalAccountingEstimatesEnvironmental,Item7andNote17totheFinancialStatementsandSupplementaryData,Item8.)Item3.LegalProceedingsFromtimetotime,weareinvolvedinlegalproceedings,cla

219、ims,andlitigationthatoccurinconnectionwithourbusiness.Weroutinelyassessourliabilitiesandcontingenciesinconnectionwiththesemattersbaseduponthelatestavailableinformation,and,whennecessary,weseekinputfromourthird-partyadvisorswhenmakingtheseassessments.ConsistentwithSECrulesandrequirements,wedescribebe

220、lowmaterialpendinglegalproceedings(otherthanordinaryroutinelitigationincidentaltoourbusiness),materialproceedingsknowntobecontemplatedbygovernmentalauthorities,otherproceedingsarisingunderfederal,state,orlocalenvironmentallawsandregulations(includinggovernmentalproceedingsinvolvingpotentialfines,pen

221、alties,orothermonetarysanctionsinexcessof$1,000,000),andsuchotherpendingmattersthatwemaydeterminetobeappropriate.ENVIRONMENTALMATTERSWereceivenoticesfromtheEPAandstateenvironmentalagenciesallegingthatweareormaybeliableunderfederalorstateenvironmentallawsforremediationcostsatvarioussitesthroughoutthe

222、U.S.,includingsitesontheSuperfundNationalPrioritiesListorstatesuperfundlists.Wecannotpredicttheultimateimpactoftheseproceedingsandsuitsbecauseofthenumberofpotentiallyresponsiblepartiesinvolved,thedegreeofcontaminationbyvariouswastes,thescarcityandqualityofvolumetricdatarelatedtomanyofthesites,andthe

223、speculativenatureofremediationcosts.InformationconcerningenvironmentalclaimsandcontingenciesandestimatedremediationcostsissetforthinthisreportinManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperationsCriticalAccountingEstimatesEnvironmental,Item7,andNote17totheFinancialStatementsan

224、dSupplementaryData,Item8.15TableofContentsOTHERMATTERSAntitrustLitigationAswereportedinourQuarterlyReportonForm10-QforthequarterendedJune30,2007,20railshippers(manyofwhomwererepresentedbythesamelawfirms)filedvirtuallyidenticalantitrustlawsuitsinvariousfederaldistrictcourtsagainstusandfourotherClassI

225、railroadsintheU.S.Currently,UPRRandthreeotherClassIrailroadsarethenameddefendantsinthelawsuits.TheoriginalplaintifffiledthefirstoftheseclaimsintheU.S.DistrictCourtinNewJerseyonMay14,2007.Thesesuitsallegedthatthenamedrailroadsengagedinprice-fixingbyestablishingcommonfuelsurchargesforcertainrailtraffi

226、c.OnAugust16,2019,theU.S.CourtofAppealsfortheDistrictofColumbiaCircuit(D.C.Circuit)affirmedthedecisionofU.S.DistrictCourtfortheDistrictofColumbia(U.S.DistrictCourt)denyingclasscertification(theCertificationDenial).Onlyfiveplaintiffsremaininthismultidistrictlitigation(MDL)originallyfiledin2007,whichr

227、emainspending.TheyareproceedingonaconsolidatedbasisintheU.S.DistrictCourtbeforetheHonorablePaulL.Friedman(MDLI).SincetheCertificationDenial,approximately111lawsuitshavebeenfiledinfederalcourtbasedonclaimsidenticaltothoseallegedintheclasscertificationcase.TheJudicialPanelonMultidistrictLitigationcons

228、olidatedthesesuitsforpretrialproceedingsintheU.S.DistrictCourtbeforetheHonorableBerylA.Howell(MDLII).OnFebruary19,2021,thecourtdeniedourmotiontoexcludeplaintiffsallegedevidenceofconspiracyunderafederalstatutedesignedtoincentandprotectrailroadcommunicationsmadetofurtherinterlineservice(i.e.,wheretwor

229、ailroadsareintheroute).InAugust2021,theD.C.CircuitagreedtohearDefendantsappeal.OralargumentisscheduledforMarch7,2022.Theappealwilladdresswhethertheinterlineevidencetheplaintiffsintendtoutilizetoprovetheallegedconspiracyisadmissibleeitherforpurposesofsummaryjudgmentorattrial.Wealsofiledamotionforsumm

230、aryjudgmentonMay14,2021,intheMDLIproceedings,andthebriefingwascompletedinSeptember2021.OnOctober20,2021,JudgeFriedmanissuedanorderstatingthathewillnotconsiderthemotionsforsummaryjudgmentuntilaftertheD.C.Circuitappealmentionedaboveisdecided.AswereportedinourCurrentReportonForm8-K,filedonJune10,2011,t

231、heRailroadreceivedacomplaintfiledintheU.S.DistrictCourtfortheDistrictofColumbiaonJune7,2011,byOxbowCarbon&MineralsLLCandrelatedentities(Oxbow).JustasitdidintheMDLproceedings,UnionPacificfiledamotionforsummaryjudgmentonMay14,2021,andthebriefingwascompletedinSeptember2021.Asstatedabove,thecourtissueda

232、norderthatwillnotconsiderthemotionsforsummaryjudgmentuntilaftertheD.C.Circuitappealmentionedaboveisdecided.Wecontinuetodenytheallegationsthatourfuelsurchargeprogramsviolatetheantitrustlawsoranyotherlaws.Webelievethattheselawsuitsarewithoutmerit,andwewillvigorouslydefendouractions.Therefore,wecurrent

233、lybelievethatthesematterswillnothaveamaterialadverseeffectonanyofourresultsofoperations,financialcondition,andliquidity.Item4.MineSafetyDisclosuresNotapplicable.16TableofContentsInformationAboutOurExecutiveOfficersandPrincipalExecutiveOfficersofOurSubsidiariesTheBoardofDirectorstypicallyelectsanddes

234、ignatesourexecutiveofficersonanannualbasisattheboardmeetingheldinconjunctionwiththeAnnualMeetingofShareholders,andtheyholdofficeuntiltheirsuccessorsareelected.Executiveofficersalsomaybeelectedanddesignatedthroughouttheyear,astheBoardofDirectorsconsidersappropriate.Therearenofamilyrelationshipsamongt

235、heofficers,noristhereanyarrangementorunderstandingbetweenanyofficerandanyotherpersonpursuanttowhichtheofficerwasselected.ThefollowingtablesetsforthcertaininformationcurrentasofFebruary4,2022,relatingtotheexecutiveofficers.BusinessExperienceDuringNamePositionAgePastFiveYearsLanceM.FritzChairman,Presi

236、dent,andChiefExecutiveOfficerofUPCandtheRailroad59CurrentPositionJenniferL.HamannExecutiveVicePresidentandChiefFinancialOfficerofUPCandtheRailroad541CraigV.RichardsonExecutiveVicePresident,ChiefLegalOfficer,andCorporateSecretaryofUPCandtheRailroad602KennyG.RockerExecutiveVicePresidentMarketingandSal

237、esoftheRailroad503ToddM.RynaskiVicePresidentandControllerofUPCandtheRailroad51CurrentPositionEricJ.GehringerExecutiveVicePresidentOperationsoftheRailroad424ElizabethF.WhitedExecutiveVicePresidentSustainabilityandStrategyofUPCandtheRailroad5651Ms.HamannwaselectedExecutiveVicePresidentandChiefFinancia

238、lOfficerofUPCandtheRailroadeffectiveJanuary1,2020.ShepreviouslyservedasSeniorVicePresidentFinance(April2019December2019),VicePresidentPlanning&Analysis(October2017March2019),andVicePresident&GeneralManagerMarketingandSalesAutosteam(February2016September2017).2Mr.RichardsonwaselectedExecutiveVicePres

239、ident,ChiefLegalOfficer,andCorporateSecretaryofUPCandtheRailroadeffectiveDecember8,2020.HemostrecentlyservedasVicePresidentCommercialandRegulatoryLawsince2015.3Mr.RockerwaselectedExecutiveVicePresidentMarketingandSalesoftheRailroadeffectiveAugust15,2018.Mr.RockerpreviouslyservedattheRailroadasVicePr

240、esidentMarketingandSalesIndustrialteam(October2016August2018).4Mr.GehringerwaselectedExecutiveVicePresidentOperationsoftheRailroadeffectiveJanuary1,2021.Mr.GehringerpreviouslyservedasSeniorVicePresident Transportation(July2020 December2020),VicePresident MechanicalandEngineering(January2020 July2020

241、),VicePresidentEngineering(March2018January2020),andAssistantVicePresidentEngineering(September2016March2018).5Ms.WhitedwaselectedExecutiveVicePresidentSustainabilityandStrategyofUPCandtheRailroadeffectiveFebruary3,2022.ShepreviouslyservedasExecutiveVicePresidentandChiefHumanResourcesOfficer(August2

242、018February2022)andExecutiveVicePresidentandChiefMarketingOfficer(December2016August2018).17TableofContentsPARTIIItem5.MarketfortheRegistrantsCommonEquity,RelatedStockholderMatters,andIssuerPurchasesofEquitySecuritiesOurcommonstockistradedontheNewYorkStockExchange(NYSE)underthesymbol“UNP”.AtJanuary2

243、8,2022,therewere636,898,957sharesofcommonstockoutstandingand29,397commonshareholdersofrecord.Onthatdate,theclosingpriceofthecommonstockontheNYSEwas$245.93.Wepaiddividendstoourcommonshareholdersduringeachofthepast122years.ComparisonOverOne-andThree-YearPeriodsThefollowingtablepresentsthecumulativetot

244、alshareholderreturns,assumingreinvestmentofdividends,overone-andthree-yearperiodsfortheCorporation(UNP),apeergroupindex(comprisedofCSXCorporationandNorfolkSouthernCorporation),theDowJonesTransportationIndex(DJTrans),andtheStandard&Poors500StockIndex(S&P500).PeriodUNP PeerGroup DJTrans S&P5001Year(20

245、21)23.3%26.4%33.2%28.7%3Year(2019-2021)94.0 98.7 87.6 100.3Five-YearPerformanceComparisonThefollowinggraphprovidesanindicatorofcumulativetotalshareholderreturnsfortheCorporationascomparedtothepeergroupindex(describedabove),theDJTrans,andtheS&P500.Thegraphassumesthat$100wasinvestedinthecommonstockofU

246、nionPacificCorporationandeachindexonDecember31,2016,andthatalldividendswerereinvested.Theinformationbelowishistoricalinnatureandisnotnecessarilyindicativeoffutureperformance.18TableofContentsPurchasesofEquitySecuritiesDuring2021,werepurchased33,760,492sharesofourcommonstockatanaveragepriceof$218.36.

247、Thefollowingtablepresentscommonstockrepurchasesduringeachmonthforthefourthquarterof2021:PeriodTotalNumberofSharesPurchaseda AveragePricePaidPerShare TotalNumberofSharesPurchasedasPartofaPubliclyAnnouncedPlanorProgram MaximumNumberofSharesRemainingUnderthePlanorProgrambOct.1throughOct.31 2,418,989$22

248、0.04 2,344,253 81,178,648Nov.1throughNov.30 1,479,605 240.95 1,432,039 79,746,609Dec.1throughDec.31 2,064,394 245.00 2,061,259 77,685,350Total 5,962,988$233.87 5,837,551 N/AaTotalnumberofsharespurchasedduringthequarterincludesapproximately125,437sharesdeliveredorattestedtoUPCbyemployeestopaystockopt

249、ionexerciseprices,satisfyexcesstaxwithholdingobligationsforstockoptionexercisesorvestingofretentionunits,andpaywithholdingobligationsforvestingofretentionshares.bEffectiveApril1,2019,ourBoardofDirectorsauthorizedtherepurchaseofupto150millionsharesofourcommonstockbyMarch31,2022,replacingourpreviousre

250、purchaseprogram.Theserepurchasesmaybemadeontheopenmarketorthroughothertransactions.Ourmanagementhassolediscretionwithrespecttodeterminingthetimingandamountofthesetransactions.Item6.ReservedItem7.ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperationsThefollowingdiscussionshouldber

251、eadinconjunctionwiththeConsolidatedFinancialStatementsandapplicablenotestotheFinancialStatementsandSupplementaryData,Item8,andotherinformationinthisreport,includingRiskFactorssetforthinItem1AandCriticalAccountingEstimatesandCautionaryInformationattheendofthisItem7.Thefollowingsectiongenerallydiscuss

252、es 2021and 2020itemsandyear-to-yearcomparisonsbetween2021and2020.Discussionsof2019itemsandyear-to-yearcomparisonsbetween2020and2019thatarenotincludedinthisForm10-Kcanbefoundin“ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations”inPartII,Item7,oftheCompanysAnnualReportonForm10-

253、KforthefiscalyearendedDecember31,2020.TheRailroad,alongwithitssubsidiariesandrailaffiliates,isouronereportablebusinesssegment.Althoughrevenueisanalyzedbycommodity,weanalyzethenetfinancialresultsoftheRailroadasonesegmentduetotheintegratednatureoftherailnetwork.EXECUTIVESUMMARY2021ResultsCoronavirusPa

254、ndemicOurresultsduring2021continuedtobeimpactedbytheeffectsofCOVID.Mostnotablyweresupplychainissuesintheautomotiveindustryduetosemiconductorchipshortagesandcongestioninseveralpartsoftheintermodalsupplychain.Theimpactofthesemiconductorchipshortageismaskedinouryear-over-yearfinancialcomparisonfor2021a

255、nd2020asthesecondquarterof2020sawatemporarysuspensionofautomotiveproductionduetothepandemic.Excludingthesecondquarter,automotiveshipmentsweredown14%year-over-year.Thepandemicalsoupendedtheintermodalsupplychainasdemandforconsumergoodsremainedhigh.Theelevateddemandadverselyaffectedtheports,chassisavai

256、lability,truckdriversupply,andwarehousereceivingcapacity.Thesedisruptionslimitedourrevenuegrowthbyslowingassetturnsandincreasingcoststhroughlowerfreightcarvelocityandmultiplecontainerhandlingsthatimpededouroperatingefficiency.Railcarloadingsalsowereimpactedasadjustmentsmadetocompensateforconstrained

257、inlanddrayageandwarehousecapacityshiftedtrafficpatterns,drivingdeclinesininternationalintermodalshipments.Demandinothermarketsincreasedastheeconomyrecovered.OnOctober11,2021,theCompanyannouncedthatitiscomplyingwiththePresidentialExecutiveOrder14042(EO)thatmandatesemployeesoffederalcontractorsandsubc

258、ontractorsbefullyvaccinatedagainstCOVID,unlessemployeesarelegallyentitledtoanaccommodation.AfederaldistrictcourtissuedanationwideinjunctionagainstthevaccinemandateintheEO.Thecompanyiscomplyingwiththeinjunctionwhilecontinuingtoencourageemployeestogettheirvaccinations.Fullimplementationandenforcemento

259、ftheCOVIDvaccinemandatemayaffectworkforceavailabilityrangingfrom,amongotherthings,absencestoobtainvaccination,recoveryfromanyside-effects,resignationsfromunwillingnesstocomplywiththemandate,and/ororganizedworkstoppagesfromanyofourorganizedunionlaborworkforce.Afterreceivingcommunicationsfromthreeofou

260、runionsobjectingtothevaccinationrequirement,wefiledlawsuitsonOctober15,2021,topreventanydisruptiontothenationalrailnetwork.WeseektoresolveanyvaccinationdisputethroughthevariousdisputeresolutionproceduresoutlinedintheRailwayLaborAct.Theselawsuitshavebeenstayedpendingafinaldispositionoftheenforceabili

261、tyoftheEObythecourt.19TableofContentsSafetyThehealthandwellbeingofouremployeeswasafocalpointin2021aswenavigatedthecontinuouslychangingenvironmentduetoCOVID.Wehaveandarecontinuingtoadapttoprotectthesafetyofouremployees,ourcustomers,andthecommunitiesweserve.Safetyproceduresandpoliciescontinuetoberefin

262、edbasedonCentersforDiseaseControlandPrevention(CDC)guidelines.Inthisever-changingenvironment,weremainintentlyfocusedonreducingriskandeliminatingincidentsforouremployees,ourcustomers,andthepublic.WecontinuedtouseTotalSafetyCulture,CouragetoCare,COMMIT(Coaching,Observing,Mentoring,andMotivatingwithInt

263、egrityandTrust),andPeertoPeerthroughoutouroperationstoenhanceemployeesafetyandengagement.Throughouttheyear,weworkedtoimplementaphysicsengineandproprietarysoftwaretoevaluatetrainandroutecharacteristicstoenableproactiveinterventiontopreventderailments.Despitetheseefforts,oursafetyresultsdeterioratedye

264、ar-over-year.Ourreportablepersonalinjuryincidentsrateper200,000employee-hoursof0.98increased9%from2020andourreportableequipmentincidentratepermilliontrainmilesincreased7%.Inthesecondhalfof2021,weengagedathird-partyexperttoevaluatetheeffectivenessofoursafetyprogramsandreceivedrecommendationsforimprov

265、ement,whichwewillimplementin2022.NetworkOperationsWefacedmanyoperationalchallengesthroughout2021,includingWinterStormUri,globalsupplychaindisruptions,wildfires,bridgeoutages,mudslides,andhurricanes.Thesechallengesrequiredadjustmentstoourtransportationplansandimpactedoverallfluidityofthenetwork.Asare

266、sult,manyofouroperatingmetricsdeterioratedyear-over-year.Freightcarvelocitydecreasedduetoincreasedterminaldwellandhigheroperatingcarinventorylevels,whichdrovelowertripplancompliance.Toassistwithimprovingnetworkfluiditywearemaintaininghighercrewandlocomotiveresourcesintheshort-term.Oncethenetworkisba

267、lancedandserviceisrestored,wewilladjustourresourcestothecurrentvolumelevels.AdditionaldetailsonthesemetricsarediscussedinOtherOperating/PerformanceandFinancialStatisticsofthisItem7.FreightRevenuesOurfreightrevenuesincreased11%year-over-yearto$20.2billiondrivenbya4%increaseinvolume,higherfuelsurcharg

268、erevenue,corepricinggains,andpositivemixoftraffic(forexample,arelativeincreaseinindustrialshipments,whichhaveahigheraveragerevenuepercar(ARC).Volumeincreasedineverykeymarketsegmentcomparedto2020duetotherecoveryfromthedepressedeconomybroughtonbytheCOVIDpandemicin2020.Whilethemarketsreboundedfrom2020,

269、our2021volumelevelswere4%below2019pre-pandemiclevels.FinancialResultsIn2021,wegeneratedoperatingincomeof$9.3billion,19%above2020,aswerecoveredfromtheimpactsofCOVID.Inaddition,2020includedanon-cashimpairmentchargeof$278millionrelatedtoourBrazosyardinvestment.Higherfuelprices,increasedvolume-relatedco

270、sts,inflation,andcostsassociatedwithWinterStormUriandthewildfiresinCaliforniadroveoperatingexpensesup7%from2020.Revenuefromtheadditionalvolumeandtrafficmix,higherfuelsurchargerevenue,improvedpricing,productivityinitiatives,andintermodalaccessorialchargesmorethanoffsettheincreasedexpenses,producingan

271、all-timerecord57.2%operatingratio,improving2.7pointsfrom2020.Netincomeof$6.5billiontranslatedintoearningsof$9.95perdilutedshare,up26%from2020.FuelPricesOuraveragepriceofdieselfuelin2021was$2.23pergallon,anincreaseof49%from2020.Thehigherpriceresultedinhigheroperatingexpensesof$668million(excludingany

272、impactfromyear-over-yearvolumeincreases).Grosston-milesincreased6%drivinghigherfuelexpense.Partiallyoffsettingthisincreasewasa1%improvementtoarecordlowfuelconsumptionrate,computedasgallonsoffuelconsumeddividedbygrosston-miles.LiquidityWearecontinuallyevaluatingourfinancialconditionandliquidity.OnDec

273、ember31,2021,wehad$960millionofcashandcashequivalents.Despitethechallengingyear,wegenerated$9.0billionofcashfromoperatingactivities,yieldingfreecashflowof$3.5billionafterreductionsof$2.7billionforcashusedininvestingactivitiesand$2.8billionindividends.Werepurchased$7.3billionofourshares.Wehavebeen,an

274、dweexpecttocontinuetobe,incompliancewithourdebtcovenants.Wehave$2.0billionofcreditavailableunderourrevolvingcreditfacilityandupto$500millionundrawnonourReceivablesFacility.AsofDecember31,2021,noneoftherevolvingcreditfacilitywasdrawn.AdditionaldetailsarediscussedinLiquidityandCapitalResourcesofthisIt

275、em7.Freecashflowisdefinedascashprovidedbyoperatingactivitieslesscashusedininvestingactivitiesanddividendspaid.FreecashflowisnotconsideredafinancialmeasureunderGAAPbySECRegulationGandItem10ofSECRegulationS-Kandmaynotbedefinedandcalculatedbyothercompaniesinthesamemanner.Webelievefreecashflowisimportan

276、ttomanagementandinvestorsinevaluatingourfinancialperformanceandmeasuresourabilitytogeneratecashwithoutadditionalexternalfinancing.Freecashflowshouldbeconsideredinadditionto,ratherthanasasubstitutefor,cashprovidedbyoperatingactivities.Thefollowingtablereconcilescashprovidedbyoperatingactivities(GAAPm

277、easure)tofreecashflow(non-GAAPmeasure):Millions2021 2020 2019Cashprovidedbyoperatingactivities$9,032$8,540$8,609Cashusedininvestingactivities(2,709)(2,676)(3,435)Dividendspaid(2,800)(2,626)(2,598)Freecashflow$3,523$3,238$2,57620TableofContents2022OutlookSafetyOperatingasaferailroadbenefitsallourcons

278、tituents:ouremployees,customers,shareholders,andthecommunitiesweserve.Wewillcontinueusingamulti-facetedapproachtosafetyutilizingtechnology,riskassessments,training,employeeengagement,qualitycontrol,andtargetedcapitalinvestments.Asmentionedpreviously,ourinitiativeswillbeinformedbyrecommendationsident

279、ifiedinthethird-partyassessmentoftheeffectivenessofoursafetyprogram.Consistentwiththeserecommendations,wewillcontinuallyevaluateandadjustdeploymentofTotalSafetyCulture,CouragetoCare,COMMIT,andPeertoPeerthroughoutouroperations,whichallowsustoidentifyandimplementbestpracticesforemployeeandoperationals

280、afety.Inaddition,ourOperatingPracticesCommandCenterwillcontinuetheimplementationofourpredictivetechnologyandreducevariabilitybyidentifyingcausesofmainlineserviceinterruptionsanddevelopsolutions,inadditionto,assistingemployeeswithunderstandingpolicies,procedures,andbestpracticesforhandlingtrains.Wewi

281、llcontinueoureffortstoutilizedatatoidentifyandmitigaterisk,detectraildefects,improveorclosecrossings,andeducatethepublicandlawenforcementagenciesaboutcrossingsafetythroughacombinationofourownprograms(includingriskassessmentstrategies),industryprograms,andlocalcommunityactivitiesacrossthenetwork.Weal

282、soarededicatedtomaintainingahealthyworkplaceandcontinuemonitoringtheCOVIDcaselevels,modifyingourpoliciesasneededtoprotectemployeesandminimizetheriskofworkplacetransmission.NetworkOperationsIn2022,wewillcontinuetransformingourrailroadtoincreasereliabilityofourserviceproduct,reducevariabilityinnetwork

283、operations,andimproveresourceutilization.Furthertrainlengthinitiativesallowustoefficientlyaddincrementalvolumegrowthtoourexistingtrainnetwork.Wewillcontinuetomakecapitalinvestmentstoimproveoperationalperformanceandefficiency.Amoreefficientnetworkrequiresfewerlocomotives,freightcars,andotherresources

284、.FinancialExpectationsWeexpectvolumetooutpaceindustrialproductionin2022astheresultsofourbusinessdevelopmenteffortsarebringingnewcustomerstoourrailroad.Inthecurrentenvironment,weexpectcontinuedmarginimprovementdrivenbypricinginexcessofinflationandongoingefficiencyinitiatives,betterleveragingourresour

285、cesandimprovingourserviceproduct.Weexpecttogeneratestrongcashflowfromoperatingactivitiesallowingustocontinueourindustryleadingdividendpayoutratioandstrongsharerepurchaseprograms.Economicuncertaintiesremainin2022asCOVIDimpactslingerandcouldhaveamaterialimpactonour2022financialandoperatingresults.Rega

286、rdlessofexternalfactors,wewillfocusonefficientlymanagingoperationsseekingnewbusinessopportunitiesprotectingouremployees,customers,andcommunitiesandprovidingexcellentservicetoourcustomers.MarketConditionsWhilecurrentforecastsforindustrialproductionindicatecontinuedeconomicgrowth,weexpectuncertainties

287、withCOVIDandtheeconomytocontinuein2022.Howgovernmentsandconsumersreacttotheresurgence,mutationofthevirus,andvaccinemandatescouldresultinorcontributetocustomerdisruptions,anelongatedrecoveryperiod,constrainedworkforceavailability,orageneraleconomicdownturnfromcurrentlevels.Disruptionsinourcustomerssu

288、pplychainscausedbythepandemicorotherfactorsmaycontinuetoimpactourshipments.Inaddition,otherfactorssuchaschangesinmonetarypolicymayaffecteconomicactivityanddemandforrailtransportationnaturalgasprices,weatherconditions,anddemandforotherenergysourcesmayimpactthecoalmarketcrudeoilpricespreadsmaydrivedem

289、andforpetroleumproductsanddrillingmaterialsavailabletruckcapacitycouldimpactourintermodalbusinessandinternationaltradeagreementscouldpromoteorhindertrade.FuelPricesProjectionsforcrudeoilandnaturalgascontinuetofluctuateinthecurrentenvironment.Weagaincouldseevolatilefuelpricesduringtheyear,astheyarese

290、nsitivetoglobalandU.S.domesticdemand,refiningcapacity,geopoliticalevents,weatherconditions,andotherfactors.Aspricesfluctuate,therewillbeatimingimpactonearnings,asourfuelsurchargeprogramstrailincreasesordecreasesinfuelpricebyapproximatelytwomonths.Significantchangesinfuelpricescouldhaveanimpactoncons

291、umerdiscretionaryspending,impactingdemandforvariousconsumerproductswetransport.Alternatively,thosechangescouldhaveaninverseimpactoncommoditiessuchascoal,petroleumproducts,anddomesticdrilling-relatedshipments.CapitalPlanIn2022,weexpectourcapitalplantobeapproximately$3.3billion,up10%from2021aswemakein

292、vestmentstosupportourgrowthstrategy.Wewillcontinuetohardenourinfrastructure,replaceolderassets,andimprovethesafetyandresilienceofthenetwork.Inaddition,theplanincludestargetedfreightcaracquisitions,investmentsingrowth-relatedprojectstodrivemorecarloadstothenetwork,certainrampstoefficientlyhandlevolum

293、esfromnewandexistingintermodalcustomers,continuousmodernizationofourlocomotivefleet,andprojectsintendedtoimproveoperationalefficiency.Thecapitalplanmayberevisedifbusinessconditionswarrantorifnewlawsorregulationsaffectourabilitytogeneratesufficientreturnsontheseinvestments.(Seefurtherdiscussioninthis

294、Item7underLiquidityandCapitalResourcesCapitalPlan.)21TableofContentsRESULTSOFOPERATIONSOperatingRevenues%Change%ChangeMillions2021 2020 2019 2021v2020 2020v2019Freightrevenues$20,244$18,251$20,243 11%(10)%Othersubsidiaryrevenues 741 743 880 -(16)Accessorialrevenues 752 473 514 59 (8)Other 67 66 71 2

295、 (7)Total$21,804$19,533$21,708 12%(10)%Wegeneratefreightrevenuesbytransportingfreightorothermaterialsfromourthreecommoditygroups.Freightrevenuesvarywithvolume(carloads)andARC.Changesinprice,trafficmix,andfuelsurchargesdriveARC.Customerincentives,whichareprimarilyprovidedforshippingto/fromspecificloc

296、ationsorbasedoncumulativevolumes,arerecordedasareductiontooperatingrevenues.Customerincentivesthatincludevariableconsiderationbasedoncumulativevolumesareestimatedusingtheexpectedvaluemethod,whichisbasedonavailablehistorical,current,andforecastedvolumes,andrecognizedastherelatedperformanceobligationi

297、ssatisfied.Werecognizefreightrevenuesovertimeasshipmentsmovefromorigintodestination.Theallocationofrevenuebetweenreportingperiodsisbasedontherelativetransittimeineachreportingperiodwithexpensesrecognizedasincurred.Othersubsidiaryrevenues(primarilylogisticsandcommuterrailoperations)aregenerallyrecogn

298、izedovertimeasshipmentsmovefromorigintodestination.Theallocationofrevenuebetweenreportingperiodsisbasedontherelativetransittimeineachreportingperiodwithexpensesrecognizedasincurred.Accessorialrevenuesarerecognizedatapointintimeasperformanceobligationsaresatisfied.Ourfreightrevenuesincreased11%year-o

299、ver-yearto$20.2billiondrivenbya4%increaseinvolume,higherfuelsurchargerevenue,corepricinggains,andpositivemixoftraffic(forexample,arelativeincreaseinindustrialshipments,whichhaveahigherARC).Volumeincreasedineverykeymarketsegmentcomparedto2020duetotherecoveryfromthedepressedeconomybroughtonbytheCOVIDp

300、andemicin2020.Whilethemarketshavereboundedfrom2020,our2021volumelevelsare4%below2019pre-pandemiclevels.Ourfuelsurchargeprogramsgeneratedfreightrevenuesof$1.7billionand$1.0billionin2021and2020,respectively.Fuelsurchargerevenuein2021increased$0.7billionasaresultofa49%increaseinfuelpriceanda4%increasei

301、ncarloadings,partiallyoffsetbythelagimpactonfuelsurcharge(itcangenerallytakeuptotwomonthsforchangingfuelpricestoaffectfuelsurchargesrecoveries).In2021,othersubsidiaryrevenueswereflatwith2020asthesemiconductorshortagenegativelyimpacting2021automotiveproductionoffsettherecoveryfromotherCOVIDrelateddec

302、linesin2020.Accessorialrevenueincreasedin2021comparedto2020drivenbyincreasedintermodalaccessorialchargestiedtoglobalsupplychaindisruptions.Otherrevenuewasessentiallyflatyear-over-year.22TableofContentsThefollowingtablessummarizetheyear-over-yearchangesinfreightrevenues,revenuecarloads,andARCbycommod

303、itytype:FreightRevenues%Change%ChangeMillions2021 2020 2019 2021v2020 2020v2019Grain&grainproducts$3,181$2,829$2,776 12%2%Fertilizer 697 660 653 6 1Food&refrigerated 998 937 1,008 7 (7)Coal&renewables 1,780 1,534 2,092 16 (27)Bulk 6,656 5,960 6,529 12 (9)Industrialchemicals&plastics 1,943 1,845 1,88

304、5 5 (2)Metals&minerals 1,811 1,580 2,042 15 (23)Forestproducts 1,357 1,160 1,160 17 -Energy&specializedmarkets 2,212 2,037 2,385 9 (15)Industrial 7,323 6,622 7,472 11 (11)Automotive 1,761 1,680 2,123 5 (21)Intermodal 4,504 3,989 4,119 13 (3)Premium 6,265 5,669 6,242 11 (9)Total$20,244$18,251$20,243

305、11%(10)%RevenueCarloads%Change%ChangeThousands2021 2020 2019 2021v2020 2020v2019Grain&grainproducts 805 745 708 8%5%Fertilizer 201 193 190 4 2Food&refrigerated 189 185 192 2 (4)Coal&renewables 819 797 997 3 (20)Bulk 2,014 1,920 2,087 5 (8)Industrialchemicals&plastics 606 587 611 3 (4)Metals&minerals

306、 697 646 744 8 (13)Forestproducts 250 220 220 14 -Energy&specializedmarkets 559 539 624 4 (14)Industrial 2,112 1,992 2,199 6 (9)Automotive 701 692 858 1 (19)Intermodala 3,211 3,149 3,202 2 (2)Premium 3,912 3,841 4,060 2 (5)Total 8,038 7,753 8,346 4%(7)%Change%ChangeAverageRevenueperCar2021 2020 2019

307、 2021v2020 2020v2019Grain&grainproducts$3,953$3,797$3,919 4%(3)%Fertilizer 3,470 3,427 3,448 1 (1)Food&refrigerated 5,279 5,047 5,241 5 (4)Coal&renewables 2,173 1,926 2,098 13 (8)Bulk 3,305 3,104 3,128 6 (1)Industrialchemicals&plastics 3,207 3,144 3,087 2 2Metals&minerals 2,598 2,445 2,745 6 (11)For

308、estproducts 5,424 5,269 5,264 3 -Energy&specializedmarkets 3,956 3,780 3,821 5 (1)Industrial 3,467 3,324 3,398 4 (2)Automotive 2,511 2,427 2,474 3 (2)Intermodala 1,403 1,267 1,286 11 (1)Premium 1,601 1,476 1,538 8 (4)Average$2,519$2,354$2,425 7%(3)%aForintermodalshipments,eachcontainerortrailerequal

309、sonecarload.23TableofContentsBulkBulkincludesshipmentsofgrainandgrainproducts,fertilizer,foodandrefrigeratedgoods,andcoalandrenewables.Freightrevenuesfrombulkshipmentsincreasedin2021comparedto2020duetoa5%volumeincrease,corepricinggains,higherfuelsurchargerevenue,andpositivebusinessmix.Despiteweather

310、disruptionsinthefirstquarterof2021,volumeincreasedwithstrongdemandforgraininthefirsthalfoftheyearandcoalinthesecondhalf,duetohighernaturalgasprices.Inaddition,strengthintheexportpotashmarketandrecoveryfromtheCOVIDpandemicthatnegativelyimpactedproductionofimportedbeer,foodproducts,andthedemandforetha

311、nolandrelatedproductsin2020contributedtoadditionalincreasesinvolume.2021BulkCarloadsIndustrialIndustrialincludesshipmentsofindustrialchemicalsandplastics,metalsandminerals,forestproducts,andenergyandspecializedmarkets.Freightrevenuesfromindustrialshipmentsincreasedin2021versus2020duea6%increaseinvol

312、ume,corepricinggains,higherfuelsurcharge,andpositivemixoftraffic.Strengthfromthepandemicrecoveryovercamethefirstquarter2021lossescausedbyWinterStormUridisruptionsintheGulfCoast,whichimpactedtheindustrialchemicalsandplasticsandmetalsandmineralsindustries.Additionally,forestproductshipmentsincreaseddu

313、etohigherdemandforcardboardboxesandlumber.2021IndustrialCarloadsPremium Premiumincludesshipmentsoffinishedautomobiles,automotiveparts,andmerchandiseinintermodalcontainers,bothdomesticandinternational.Freightrevenuesfrompremiumshipmentsincreased11%in2021comparedto2020,despitetheweatherdisruptionsinth

314、efirstquarterof2021,drivenbyhigherfuelsurcharges,corepricinggains,anda2%volumeincrease.Automotiveshipmentsof173thousandcarloadsinthesecondquarterof2021weremorethandoublethe79thousandcarloadsinthesameperiodin2020asNorthAmericanmanufacturingplantssuspendedproductionduetothepandemicinthatyear.Thisrecov

315、erymaskedtheimpacttoautomotiveshipmentsin2021duetotheon-goingshortageofsemiconductors.Excludingthesecondquarter,automotiveshipmentsaredown14%year-over-year.Thepandemicalsoupendedtheintermodalsupplychainasdemandforconsumergoodsremainedhigh.Thishighdemandstrainedportcapacity,chassisavailability,truckd

316、riversupply,andwarehousereceivingcapacity.Despitetheglobalsupplychaindisruptions,intermodalshipmentsincreased2%in2021duetoimprovingeconomicconditions,inventoryrestocking,contractwins,andcontinuedstrengthofe-commerceandparcelshipments.2021PremiumCarloadsMexicoBusinessEachofourcommoditygroupsincludesr

317、evenuefromshipmentstoandfromMexico.RevenuefromMexicobusinesswas$2.4billionin2021,up13%comparedto2020,drivenbya3%increaseinvolumeandhigherfuelsurchargerevenue,corepricinggains,andpositivemixoftraffic.Thevolumeincreasewasdrivenbytherecoveryfromthe2020pandemicandanincreaseinpetroleumandgrainshipments,p

318、artiallyoffsetbytheimpactoftheglobalsupplychaindisruptionsonintermodalshipmentsandthesemiconductorshortageintheautomotiveindustry.OperatingExpenses%Change%ChangeMillions2021 2020 2019 2021v2020 2020v2019Compensationandbenefits$4,158$3,993$4,533 4%(12)%Depreciation 2,208 2,210 2,216 -Fuel 2,049 1,314

319、 2,107 56 (38)Purchasedservicesandmaterials 2,016 1,962 2,254 3 (13)Equipmentandotherrents 859 875 984 (2)(11)Other 1,176 1,345 1,060 (13)27Total$12,466$11,699$13,154 7%(11)%24TableofContentsOperatingexpensesincreased$767millionin2021comparedto2020drivenbyhigherfuelprices,volume-relatedcosts,inflati

320、on,highercasualtycosts,2020managementactions,weatherandwildfire-relatedexpenses,incentivecompensation,andhigherstateandlocaltaxes.Partiallyoffsettingtheseincreasescomparedto2020includea$278millionimpairmentchargein2020,productivityinitiatives,aone-timebonuspaymentforagreementemployeesin2020,andlower

321、severancecosts.Fullyearresultsof2021and2020bothincludeareductionofexpenseforweatherandwildfire-relatedinsurancereimbursements,$6millionand$25million,respectively.2021OperatingExpensesCompensationandBenefitsCompensationandbenefitsincludewages,payrolltaxes,healthandwelfarecosts,pensioncosts,andincenti

322、vecosts.In2021,expensesincreased4%comparedto2020,duetovolumerelatedcosts,inflation,2020managementactionsrespondingtothesharpdeclineinvolume(temporaryunpaidleave,salaryreductions,andshopclosures),incentivecompensation,andhighercostsduetoweatherandwildfire-relatedevents.Partiallyoffsettingtheseincreas

323、eswereproductivityinitiativesresultinginemployeelevelsthatdeclined3%comparedto2020despitea4%volumeincrease,a2020one-timebonuspaymentforagreementemployeeswhoworkedduringthepandemic,andlowerseverancecosts.DepreciationThemajorityofdepreciationrelatestoroadproperty,includingrail,ties,ballast,andothertra

324、ckmaterial.Depreciationexpensewasflatin2021comparedto2020.FuelFuelincludeslocomotivefuelandgasolineforhighwayandnon-highwayvehiclesandheavyequipment.Locomotivedieselfuelprices,whichaveraged$2.23pergallon(includingtaxesandtransportationcosts)in2021,comparedto$1.50pergallonin2020,increasedexpenses$668

325、million(excludinganyimpactfromincreasedvolumeyear-over-year).Grosston-milesincreased6%drivinghigherfuelexpense.Partiallyoffsettingthisincreasewasa1%improvementtoarecordlowfuelconsumptionrate,computedasgallonsoffuelconsumeddividedbygrosston-miles.PurchasedServicesandMaterialsExpenseforpurchasedservic

326、esandmaterialsincludesthecostsofservicespurchasedfromoutsidecontractorsandotherserviceproviders(includingequipmentmaintenanceandcontractexpensesincurredbyoursubsidiariesforexternaltransportationservices)materialsusedtomaintaintheRailroadslines,structures,andequipmentcostsofoperatingfacilitiesjointly

327、usedbyUPRRandotherrailroadstransportationandlodgingfortraincrewemployeestruckingandcontractingcostsforintermodalcontainersleasedautomobilemaintenanceexpensesandtoolsandsupplies.Purchasedservicesandmaterialsincreased3%in2021comparedto2020drivenbyinflation,higherprofessionalservicesexpense,volume-rela

328、tedcostsassociatedwithourintermodalbusiness,highercostsduetoweatherandwildfire-relatedevents,increasedlocomotiveandfreightcarmaintenanceexpenseasweaddedresourcestothenetwork,andhighercostsfortransportationoftraincrews.EquipmentandOtherRentsEquipmentandotherrentsexpenseprimarilyincludesrentalexpenset

329、hattheRailroadpaysforfreightcarsownedbyotherrailroadsorprivatecompaniesfreightcar,intermodal,andlocomotiveleasesandofficeandotherrentexpenses,offsetbyequityincomefromcertainequitymethodinvestments.Equipmentandotherrentsexpensedecreased2%comparedto2020drivenbylowerrentonequipmentinstorageandhigherequ

330、ityincomefromourinvestmentinTTXCompany,partiallyoffsetbyincreasedfreightcarrentexpenseduetovolumeincreasesandslowerfreightcarvelocity.Other Otherexpensesincludestateandlocaltaxes,freight,equipmentandpropertydamage,utilities,insurance,personalinjury,environmental,employeetravel,telephoneandcellular,c

331、omputersoftware,baddebt,andothergeneralexpenses.Otherexpensesdecreased13%in2021comparedto2020asaresultofa$278millionnon-cashimpairmentchargerelatedtoourBrazosyardinvestmentin2020,lowerwrite-offsofcancelledin-progresscapitalprojects,2020leaseimpairments,andhigherequityincome.Partiallyoffsettingthesed

332、ecreaseswereincreasedcasualtyexpenses,includingpersonalinjury,damagedfreight,andenvironmental,andhigherstateandlocaltaxes.Bothperiodsin2021and2020includedareductionofexpenseforweatherandwildfire-relatedinsurancereimbursements,$6millionand$25million,respectively.Non-OperatingItems%Change%ChangeMillio

333、ns2021 2020 2019 2021v2020 2020v2019Otherincome,net$297$287$243 3%18%Interestexpense(1,157)(1,141)(1,050)1 9Incometaxexpense(1,955)(1,631)(1,828)20 (11)OtherIncome,netOtherincomeincreasedin2021comparedto2020duetoa$36milliongainfromthesaleofaninvestmentinatechnologycompany,partiallyoffsetbylowerrealestatesalegains.Realestatesalesin2021includeda$50milliongainfromapropertysaletotheColoradoDepartmento