Union Pacific 2Q17 Earnings Call Notes

Lance Fritz – Chairman, President & CEO

Headwinds in wheat exports

“high global production of both seed grains and wheat, coupled with a lower quality domestic wheat harvest will create headwinds in our export markets.”

Cautious with respect to auto sales

“We remain cautious with respect to auto sales due to current sales trend, higher inventory, and rising interest rates. The reduced SAR will impact both the finished vehicles and parts with a potential upset in over-the-road conversion opportunities.”

Permian could require 40-50m tons of frac sand

“the Permian is roughly 15% brown and 85% white sand. And the demand this year, call it 28 million or 29 million tons. We see estimates going into next year where there are proposed mines that would bring on anywhere from 20 million to 40 million or 50 million tons and perhaps demand in the Permian being in that 40 million to 50 million tons.”

Rob Knight

We think volume should be our friend in the third quarter

“volume, we think is going to be our friend certainly in the third quarter improving from the second quarter. And we’ll just have to see how the numbers play out.”