Thursday, November 21, 2013

UP renews share repurchase program ahead of schedule

Written by  William C. Vantuono, Editor-in-Chief
Union Pacific’s Board of Directors on Thursday, Nov. 21, 2013, approved the early renewal of its share repurchase program, authorizing repurchase of up to 60 million common shares by Dec. 31, 2017.

This new authorization is effective Jan. 1, 2014, and replaces the current authorization, which will now expire on December 31, 2013, three months earlier than its original expiration date. The new four-year authorization allows for the repurchase of another 13% of current outstanding shares.

In addition, the UP Board declared a quarterly dividend of 79 cents per share on the company’s common stock, payable Jan. 2, 2014, to shareholders of record as of Dec. 3, 2013. UP said it “has paid dividends on its common stock for 114 consecutive years.”

“This new share repurchase authorization demonstrates Union Pacific’s continued long-term commitment to increasing shareholder value, while maintaining our strong, investment grade credit ratings,” said Chief Financial Officer Rob Knight. “Since the inception of our current authorization program in April 2011, the growing profitability of the franchise has allowed us to increase our declared dividend more than two-fold and return more than $4 billion to shareholders through our repurchase program. We have confidence in our continued ability to earn re-investible returns on our diverse franchise opportunities. We expect to generate strong cash from operations to support our strategic growth capital investments, maintain a strong balance sheet, and reward shareholders with increasing returns.”

Since announcing its initial program in January 2007, UP has repurchased approximately 19% of its outstanding shares at a total cost of nearly $8.6 billion, with an average purchase price of $84.50 per share.