Lance Fritz 1Q17 Earnings Call Notes

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Lance M. Fritz – Union Pacific Corp.

Frac sand and coal stabilized

“we’re seeing particular strength in a few markets such as frac sand. Coal seems to have stabilized and we’re seeing some signs of gradual improvement in other areas of the economy.”

See 3% Inflation rate

“a higher inflation rate, which for the full year we still see overall inflation in that 3% range which is obviously is higher than what we ended up with last year.”

We think the administration gets that US economy linked to trade

“in terms of trade overall, our perspective is the following: that the U.S. economy is tightly connected to our trading partners. We understand that open global trade and more markets available to U.S. manufacturers and producers is critical both for jobs in the United States as well as for the economic vibrancy of the United States. We believe that that’s well understood also in our current administration and we believe that while there are opportunities to both enforce existing trade agreements, enhance them and negotiate new ones, that the long-term answer is more markets available to U.S. manufacturers and producers is better than fewer markets available. That’s essentially the pathway towards economic prosperity and job creation.”

Elizabeth F. Whited – Union Pacific Corp.

Seeing substantial increases in demand for Frac sand in Texas

Okay. So, we are seeing substantial increases in demand in Texas, specifically in the Permian Basin. We’d mentioned that we were up 59% in the quarter. We were up almost 100% in the Permian Basin and we’re up around 40% in Eagle Ford. We’re seeing some spiking demand as well in the Niobrara, but not as substantial. I would say that that is sustaining and maybe even growing a little bit as we enter into the second quarter. And I don’t see anything right now that changes that, so that’s been a bright spot for us.