Third Quarter 2012 Earnings Release

October 18, 2012

Jack Koraleski, CEO

Third Quarter 2012 Results

Positives All-Time Quarterly Records
Operating Revenue Operating Income Operating Ratio Earnings Customer Satisfaction

Earnings Per Share

Third Quarter
+18%

$2.19
All-Time Quarterly Record

$1.85 $1.56

Safety Franchise Diversity Challenges Coal Volumes

2010

2011

2012

Third Quarter 2012 Marketing & Sales Review

October 18, 2012

Eric Butler, Executive VP Marketing & Sales

Customer Satisfaction
GOOD 89 87 178 175 172 169 164 174 90 90 91 92 92 93 93 94
All-Time Quarterly Record

91

180

180 175 172

181

92 = Full Year Record

1Q 2Q 3Q 2010 4Q 1Q 2Q 3Q 2011 4Q 1Q 2Q 2012 3Q

Customer Satisfaction 7 Day Carloadings

Third Quarter Recap

Volume Growth
Chemicals s +18%

Revenue Mix
Intermodal 20% Industrial 17% Coal 21% Agricultural 16% Autos 9% Chemicals 17%

Automotive ve Intermodal
Industrial Products Agricultural Sub Total (excl Coal) Coal +1% -2% -2% +3% -12%

+13%

Freight Revenue Performance

(Year-Over-Year Change)

+4%

+4%

Flat Volume ARC Freight Revenue

TOTAL

Flat

Agricultural Products
Revenue $783M (-4%) Volume 218K (-2%) ARC $3,596 (-2%)
Grain*

Volume Mix
Grain Products 34%

75.4

-7%

69.9

Food/ Refrigerated 27%

2011

2012

Grain Products*
-7%

Grain 39%

78.6

73.2

Quarterly Drivers Weakness in Grain

2011

2012

Food & Refrigerated*

+9%

Reduced Ethanol Production & Local Feeding of DDGS

Growth in Food & Refrigerated

58.7 54.1

2011

2012
*Volume in thousands of carloads

Automotive
Revenue $436M (+15%) Volume 181K (+13%) ARC $2,407 (+2%)

Volume Mix
Auto Parts 42%

Finished Vehicles*
+13%

104.5 92.2

Finished Vehicles 58%

2011

2012

Auto Parts*

Quarterly Drivers Pent-up Demand to Replace Aging Vehicles Improved Consumer Credit
2011 68.1

+12%

76.5

2012
*Volume in thousands of carloads

Chemicals
Revenue $841M (+17%) Volume 275K (+18%) ARC $3,064 (-1%)

Volume Mix
Petroleum & LP Gas 28% Soda Ash 9% Industrial Chemicals 22% Other 9% Fertilizer 10% Plastics 22%

Petroleum Products*
+95%

62.1

31.8

2011

2012

Quarterly Drivers Continued Growth in Crude Oil Strength in Plastics

Plastics*
+8%

60.1

55.9

2011

2012
*Volume in thousands of carloads

Coal
Revenue $1,058M (-5%) Volume 501K (-12%) ARC $2,111 (+9%)
Volume Impact
(Weekly Carloadings)
47,000
Other 13%

Southern Powder River Basin*

51.5
-13%

43,000 39,000 35,000 31,000 27,000 1Q 2Q 3Q 4Q

Southern Powder River Basin2012 74%

44.7

2011

2011

2012

Colorado/Utah*
+2%

Quarterly Drivers Low Natural Gas Prices and High Coal Stockpiles Global Demand for Western Coal
9

8.2

8.4

2011

2012
*Tons in millions

Industrial Products
Revenue $879M (+2%) Volume 299K (-2%) ARC $2,933 (+4%)
Non-Metallic Minerals*

Volume Mix
Minerals/ Consumer 20% Govt/Waste 11% Metals 19%

+11%

45.9

51.0

Lumber 9% Paper 10%

2011
Construction 31%

2012

Rock*
+6%

63.5

67.3

Quarterly Drivers
Energy Drilling Demand Increased Construction Activity Housing Start Growth Steel & Scrap, Export Ore, and Hazardous Waste Decline
2011 2011 2012

Steel & Scrap*

-11%

50.2

44.9

2012
*Volume in thousands of carloads

10

Intermodal
Revenue $1,022M (+8%) Volume 857K (+1%) ARC $1,192 (+7%)

Volume Mix
Domestic 45%
International 55%

International*
+1%

465.2

469.9

2011

2012

Quarterly Drivers Slow Economic Recovery Continues Highway Conversions

Domestic*
+1%

382.3

387.3

2011

2012
*Volume in thousands of units

11

Fourth Quarter 2012 Outlook

Agricultural Products + Soybean exports, refrigerated & beer Corn, ethanol & DDGS Autos + Pent up demand and new models Chemicals + Crude oil growth + Most other markets remain solid Coal + Export demand Natural gas price and high stockpiles Industrial Products + Shale-related growth Soft global steel market Intermodal + Domestic growth continues, muted International peak

12

Third Quarter 2012 Operations Review

October 18, 2012

Lance Fritz, Executive VP - Operations

13

Operating Foundation, Safety Focus

Third Quarter YTD
Employee
(Reportable Personal Injury Incidents Per 200,000 Man-Hours)
Good

Rail Equipment
(Reportable Rail Equipment Incidents Per Million Train Miles)
Good

Public
(Crossing Accidents Per Million Train Miles)
Good

1.36 1.15

-1%

3.38
-10%

+15%

3.35

2.34

3.15

2.18

2.04
All-Time Record

1.04
All-Time Record

2010

2011

2012

2010

2011

2012

2010

2011

2012

14

Network Performance
Third Quarter
Good

Velocity
(as Reported to the AAR)

Agility and Resiliency Demonstrated with Resources and Service Plan Volume Growth in Southern Region

27.4
All-Time Quarterly Record

+6%

25.7

23.7

24.6

26.1

2008

2009

2010

2011

2012

Service Delivery* and IS&P

Industry Spot & Pull %

Increased Capital Projects Adding Capacity

Positioned for Growth

93 86 89 86
Third Quarter Record

94 90

94
87

95 **
Good

89

2008

2009

2010

2011

2012

* Includes early deliveries

** Ties All-Time Quarterly Record

15

Network Productivity
Third Quarter
Slow Order Miles
Good

Car Utilization
(Days)
Good

1,880 1,371 990 958

-35%

9.23
8.40
All-Time Quarterly Record

9.07 -6% 8.58 8.52

623
3rd Qtr Record

2008

2009

2010

2011

2012

2008

2009

2010

2011

2012

Train Size
(Average Units per Train)
Good

Manifest Growth Impact

(3Q 2012 vs. 3Q 2011)

170 158
Intermodal Boxes

172 88
3rd Qtr Record

176 * 87 Nbr of Cars Switched Y&L Employee Days Cars Switched +0% +2% +3%

158 85 86

83

Manifest Cars 2008 2009 2010 2011 2012

* All-time quarterly record

(per employee day)

16

Agility and Resource Readiness

Volume Growth
6% 5% South Flat
South Total South

TE&Y Active Workforce

(YTD 2012 vs. YTD 2011)

10% -2% -2% 1%

Flat
Total

North West Total

3Q12 vs. 3Q11

YTD12 vs. YTD11

Active Locomotive Fleet

(YTD 2012 vs. YTD 2011)

South North West Total -8% -1% -1%

9%

Volumes in South Back to PreRecession Levels

Resource Realignment & Network Routing

Improving Network Fluidity & Performance

17

2012 Operating Outlook

Improved Safety Results Leverage Growth Opportunities in the South Remain Agile Match Resources with Volume Continue Service and Productivity Gains Capital Effectiveness

18

Third Quarter 2012 Financial Review

October 18, 2012

Rob Knight, CFO

19

Third Quarter Earnings Summary

In Millions (except EPS)
2012
Operating Revenues Operating Expenses Operating Income $5,343 3,557 1,786

2011
$5,101 3,523 1,578

%
5 1 13

Other Income Interest Expense Income Taxes Net Income

Weighted Average Diluted Shares

28 (137) (635) $1,042

475.2

17 (142) (549) $904

488.1

65 (4) 16 15
(3)

Diluted EPS

$2.19

$1.85

18

20

Freight Revenue
Third Quarter (In Millions)
+4%

+5% $4,836 -1%

$5,019

-1%

+1%
Core Price

Volume Fuel Fuel & Mix Surcharge Surcharge

(Lag Impact) (Improved Coverage)

2011

2012

21

Compensation & Benefits Expense

Third Quarter 2012 $1,188M, Flat
Compensation & Benefits
(in Millions) $1,193
Flat

$1,188

2011

2012

Lower GTMs and Training Costs Solid Operations & Productivity Gains 2011 Drought-Related Costs Labor Inflation Costs

Workforce Levels
(Quarterly Average)
+1.5%

45,507

46,205

Increased Workforce Driven by Capital and PTC

2012

2011

22

Fuel Expense
Third Quarter 2012 $880M, -4%
Gross-Ton-Miles
(in Millions)
-2%

250,855

Reduced Costs driven by Lower Volumes

Coal Declines driving GTMs down 2%

245,415

2011

2012

Average Fuel Price

(Per Gallon Consumed) $3.18
Flat

$3.19

Diesel Fuel Prices Flat Compared to 2011 Rising Fuel Prices Created Negative Lag on Fuel Surcharge Recovery

May Jun Jul Aug Sep

May Jun Jul Aug Sep

2011

2012

23

Third Quarter 2012 Expense Review

In Millions
Purchased Services & Materials
+7%

$542 $506

Higher Subsidiary Contract Expenses Increased Locomotive and Freight Car Repair Costs

2011

2012

Depreciation
+10%

$447

$408

Higher Depreciable Asset Base from Growing Capital Spend

2011

2012

24

Third Quarter 2012 Expense Review (cont)

In Millions
Equipment & Other Rents
+2%

$293

$300

Higher Short-Term Freight Car Rental Expense Lower Locomotive and Freight Car Lease Expenses

2011

2012

Other
-3%

$207

$200

Lower Equipment & Freight Damage Expenses Lower Volume-Related Costs & Cost Control Measures Higher Property Tax Expense

2011

2012

25

Operating Ratio Performance

Third Quarter
(Percent) 69.1 68.2 66.6
All-Time Quarterly Record -2.5 pts.

All-Time Quarterly Best Solid Pricing Continued Focus on Productivity Initiatives Rising Fuel Prices & Negative Lag Impact on Surcharge Recovery
Operating Ratio Impact (0.5) pts EPS Impact of ($0.05)

2010

2011

2012

Fuel Price / Recovery Lag Impact

26

Strong Financial Position

Nine Month Period Ending September 30 ($ In Millions)
Free Cash Flow*
$4,334 $4,366 ($2,866) ($2,241) ($860) ($607) 2011 2012 Dividends

Solid Free Cash Flow

Larger Capital Spend 42% Cash Dividend Increase

2011

2012

2011

2012

Cash from Ops

Investing

Strong Cash from Ops

Higher Cash Tax Payments from Prior Bonus Depreciation Programs Strong Balance Sheet Investment Grade Credit Rating
* See Union Pacific website under Investors for a reconciliation to GAAP.

Total Debt*
(Adjusted) $12,753 40.7% $13,130 40.2%

12/31/2011

9/30/2012

Adjusted Debt to Capital

27

Driving Strong Shareholder Value

Quarterly Share Repurchases
($ In Millions)
$433 $360 $248 $415 $428 $378 $381

Repurchase Activity

3.1 Million Shares in 3Q 10.8 Million Shares YTD

2011 2012 2011

2011 2012

2011 2012

1Q

2Q

3Q

4Q

Dividends & Share Repurchases

($ In Billions)
Share Buybacks Dividends

Cash Returned to Shareholders in Dividends and Share Repurchases up 27% 17.1 Million Shares Remaining in Current Authorization

+27% $1.6

$2.1

2011 YTD

2012 YTD

28

2012 Outlook
Fourth Quarter
Uncertain Economic Environment Volumes likely Flat to Modestly Negative Sub-70 Operating Ratio

Full Year
Sub-70 Operating Ratio & Record Earnings
Longer-Term Prospects Growing Shareholder Returns

29

Third Quarter 2012 Earnings Release

October 18, 2012

Jack Koraleski, CEO

30

Union Pacifics Prospects Going Forward

Economic Uncertainties Remain Agile in Changing Environment Positive on LongerTerm Opportunities Strategic Investments Increase Customer Value Generate Strong Shareholder Returns

31

Cautionary Information
This press release and related materials contain statements about the Corporations future that are not statements of historical fact, including specifically the statements regarding the Corporations expectations with respect to economic conditions; its ability to adapt to changing market conditions and continue providing quality customer service; and its ability to generate returns for its shareholders. These statements are, or will be, forwardlooking statements as defined by the Securities Act of 1933 and the Securities Exchange Act of 1934. Forwardlooking statements also generally include, without limitation, information or statements regarding: projections, predictions, expectations, estimates or forecasts as to the Corporations and its subsidiaries business, financial, and operational results, and future economic performance; and managements beliefs, expectations, goals, and objectives and other similar expressions concerning matters that are not historical facts. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times that, or by which, such performance or results will be achieved. Forward-looking information, including expectations regarding operational and financial improvements and the Corporations future performance or results are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statement. Important factors, including risk factors, could affect the Corporations and its subsidiaries future results and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements. Information regarding risk factors and other cautionary information are available in the Corporations Annual Report on Form 10-K for 2011, which was filed with the SEC on February 3, 2012. The Corporation updates information regarding risk factors if circumstances require such updates in its periodic reports on Form 10-Q and its subsequent Annual Reports on Form 10-K (or such other reports that may be filed with the SEC).

Forward-looking statements speak only as of, and are based only upon information available on, the date the statements were made. The Corporation assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. If the Corporation does update one or more forward-looking statements, no inference should be drawn that the Corporation will make additional updates with respect thereto or with respect to other forward-looking statements. References to our website are provided for convenience and, therefore, information on or available through the website is not, and should not be deemed to be, incorporated by reference herein.

32

Third Quarter 2012 Earnings Release

October 18, 2012

Question & Answer Session

33