“Turning to capital allocation, we continue to make significant investments into our business with an expected 6% increase in capital investments versus 2022 to $3.6 billion.”

In context

“ea where we don’t have direct control is the current inflationary environment, which continues to be elevated. However, we know we have it within our control to improve operations. As you heard from Eric, it’s imperative that we improve the reliability of our service product, while regaining lost productivity. In addition, as we have demonstrated consistently, we expect to generate pricing dollars that exceed inflation dollars in 2023. Assuming current fuel prices and our thoughts on volume, productivity and price, we expect to improve our full year 2023 operating ratio on a year-over-year basis. That said, there will be a lag to fully offset the impact of inflation on our profitability until we are able to actively touch or re-price our business while also further improving productivity. Turning to capital allocation, we continue to make significant investments into our business with an expected 6% increase in capital investments versus 2022 to $3.6 billion. Growth is the cornerstone to the long-term financial success of Union Pacific and we are continuing to invest in opportunities that support that strategy. In addition to the locomotive and Intermodal investments Eric described, we also are investing to support carload growth. The remainder of our capital allocation plans remain unchanged, rewarding our owners with an industry-leading dividend payout of around 45% and returning excess cash through share repurchases. With our balance sheet currently leveraged at the desired levels, the amount of cash available for repurchases will be less than in prior years and predominantly funded from cash generation. With the New Year comes new opportunities and by focusing on what we can control, we are confident in our ability to provide strong value”