1

1

Third Quarter Earnings Release October 20, 2011

Jim Young, Chairman & CEO

2

2009 2010 2011

$1.01

$1.56

$1.85

Best-Ever

Quarterly

Record

Third Quarter Results

Positives

• Best-Ever Quarter – Revenue

– Operating Income

– Earnings

• Record YTD Free Cash

Flow

• Franchise Diversity

Challenges

• Texas Drought

• International Intermodal

+19%

Earnings Per Share

2

3

Third Quarter Marketing & Sales Review October 20, 2011

Jack Koraleski, Executive VP – Marketing & Sales

4

Customer Satisfaction

1Q 2Q 3Q 4Q 1Q 2Q 3Q

87

89 90 90

91 92

91 GOOD

Overall Satisfaction

2011 2010

3

5

Third Quarter Recap

Volume ARC Freight Revenue

Performance Improvement (Year-Over-Year Change)

Volume Growth

+1%

+14% +16%

Revenue Mix

Agricultural

17%

Autos

8% Chemicals

15%

Energy

23%

Industrial

18%

Intermodal

19%

Intermodal

TOTAL

+5%

+8%

-3%

-6%

+7%

+1%

+10%

Energy

Chemicals

Industrial Products

Automotive

Agricultural

6

Agricultural Products Revenue $814M (+9%) Volume 223K (-3%) ARC $3,655 (+12%)

Grain Products

38%

Whole Grains 33%

Food/ Refrigerated

29%

Revenue Mix

*Volume in thousands of carloads

Quarterly Drivers

• Whole Grain Exports Weaken

• Growth in Grain Products

41.2

28.5

Export Whole Grains*

2010 2011

-31%

75.0 78.6

Grain Products*

2010 2011

+5%

4

7

Automotive Revenue $379M (+23%) Volume 160K (+10%) ARC $2,364 (+12%)

Finished Vehicles

77%

Revenue Mix

88.0 92.2

Finished Vehicles*

2010 2011

+5%

57.8

68.1

Auto Parts*

2010 2011

+18%

*Volume in thousands of carloads

Quarterly Drivers

• U.S. Auto Sales Up 6%

• Continued Recovery from Disaster in Japan

Auto Parts 23%

8

Chemicals Revenue $720M (+14%) Volume 233K (+5%) ARC $3,087 (+8%)

Plastics 19%

Industrial Chemicals

25%

Petroleum & Other

28%

Revenue Mix

*Volume in thousands of carloads

Fertilizer 14% Soda Ash

14%

Quarterly Drivers

• Continued Growth in Crude Oil

• Stability Across Most Major Market Segments

23.6

31.8

Petroleum Products*

2010 2011

+35%

28.9 27.5

Fertilizer*

2010 2011

-5%

5

9

Energy Revenue $1,112M (+21%) Volume 572K (+7%) ARC $1,945 (+13%)

Southern Powder River Basin

75%

Other 7%

Colorado/ Utah 18%

Revenue Mix

48.9 51.5

Southern Powder River Basin*

2010 2011

+5%

*Tons in millions

7.5

8.2

Colorado/Utah*

2010 2011

+9%

Quarterly Drivers

• New Business Drives SPRB Growth

• Improved Production and Export Demand Produces CO/UT Gains

10

Industrial Products Revenue $863M (+24%) Volume 305K (+8%) ARC $2,832 (+15%)

Paper 13%

Government/ Waste 8%

Metals 27%

Revenue Mix

Minerals/ Consumer

25%

Construction 14%

Lumber 13%

*Volume in thousands of carloads

32.9

45.9

Non-Metallic Minerals*

2010 2011

+39%

5.7

11.4

Metallic Minerals*

2010 2011

+99%

Quarterly Drivers

• Ramp-up of Iron Ore Exports to China

• Drilling Demand Drives Non-Metallic Minerals and Steel

32.9 37.1

Steel* +13%

2010 2011

6

11

Intermodal Revenue $948M (+8%) Volume 848K (-6%) ARC $1,119 (+15%)

International 47%

Domestic 53%

Revenue Mix

529.9

465.2

International*

2010 2011

-12%

374.6 382.3

Domestic*

2010 2011

+2%

*Volume in thousands of units

Quarterly Drivers

• Weak Imports and 2Q Contract Loss Impact International

• Domestic Volume Strengthens as Quarter Progresses

12

Fourth Quarter Volume Drivers

• Challenges

– World Grain Supply Softens

U.S. Export Demand

– Weak Container Imports

• Opportunities

– Continued Momentum in

Automotive

– Energy-related Demand

– Strengthening Domestic

Intermodal

– Diverse Franchise

– Strong Value Proposition

7

13

Third Quarter Operations Review October 20, 2011

Lance Fritz, Executive VP – Operations

14

2009 2010 2011

3.13 3.15 3.38

Operating Foundation, Safety Focus 3rd Quarter YTD

Rail Equipment (Reportable Derailment Incidents

Per Million Train Miles)

Public (Crossing Accidents Per

Million Train Miles)

2009 2010 2011

2.08 2.18

2.04

Good Good

2009 2010 2011

1.49

1.36

1.15

Employee (Reportable Personal Injury

Incidents Per 200,000 Man-Hours)

-15%

Good

7% -6%

8

15

0

200

400

600

800

1,000

1,200

Jan Feb Mar Apr May Jun Jul Aug Sep Oct

2011 Slow Order Miles

Weather Challenges

• Recovery from Midwest

Flooding

• Severe Drought and

Heat in Texas

– Speed Restrictions

– Maintenance Curfews

– Returning to Normal

Operations

0

500

1,000

1,500

2,000

2,500

2006 2007 2008 2009 2010 2011

Historical Slow Order Miles (Annual Average)

Good

MTD

YTD

16

23.5

27.3 26.2 26.1

24.7 24.3 24.8

86 89 93 94 94 94 94

Network Performance

7-Day Volumes

180

152

172 173 176

182 184

2008 2009 2010 1H

2011

Jul

2011

Aug

2011

Sep

2011

Industry Spot and Pull* & Velocity

2008 2009 2010 1H

2011

Jul

2011

Aug

2011

Sep

2011

Good

• Strong Service

Levels as Volumes

Increase

• Surge Resources

and Network

Resiliency

• Service Supports

Efficiency

Velocity**

*Percent Within Window ** As Reported to the AAR

9

17

Operational Efficiency 3rd Quarter

• Maintained Productivity

Emphasis

– Workforce Flexibility

– Train Size

• Leverage Existing

Resources

2008 2009 2010 2011

5.43 5.06

5.52 5.51

GTMs per Employee (In Millions)

TE&Y Furloughs (Quarterly Average)

2008 2009 2010 2011

775

4,507

1,653

487

2008 2009 2010 2011

83 85 86

88 158 158

170 172 Good

Train Size (Average Units per Train)

Intermodal

Boxes

Manifest

Cars

18

Operating Outlook

• World Class Safety

Results

• Complete Service

Recovery

• Leveraging Network

Productivity

• Positioned for

Growth

10

19

Third Quarter Financial Review October 20, 2011

Rob Knight, CFO

20

Third Quarter Earnings Summary In Millions (except EPS)

Operating Revenues $5,101 $4,408 16

Operating Expenses 3,523 3,007 17

Operating Income 1,578 1,401 13

Other Income 17 25 (32)

Interest Expense (142) (153) (7)

Income Taxes (549) (495) 11

Net Income $904 $778 16

Weighted Average Diluted Shares 488.1 497.7 (2)

Diluted EPS $1.85 $1.56 19

2011 2010 %

11

21

Freight Revenue Third Quarter (In Millions)

2010

Volume

& Mix

Core

Price

Fuel

Surcharge

2011

+ 4.5%

+ 4.5%

+ 7.0% $4,836

$4,187

+ 16%

22

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11

58% 60% 60%

48% 45%

36%

41%

13%

18%

14%

9%

5%

3%

1%

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11

3.5%

5.0%

5.5% 5.5%

4.5% 4.5% 4.5%

Pricing Gains & Leverage

Core Pricing Incremental Margins*

* 2011 adjusted for fuel price & one-time items. See Union Pacific website under Investors for a reconciliation to GAAP.

Year-over-year volume growth

12

23

Operating Expense Recap Third Quarter 2011 vs. 2010 ($ Increase in Millions)

$308

$101

$41 $36 $29

$1

Fuel

• $516 Million Increase

• Drivers:

– Fuel Price

– Inflation/Depreciation

– Volume/Productivity

– Weather Challenges

– Training

Equip &

Rents

Comp &

Benefits

Other Depr Prch Srvs

& Materials

24

Fuel Expense Third Quarter 2011 $916M, +51%

• Higher Diesel Fuel Prices

Added $260 Million to

Costs

• Conversion Spreads

Tripled Versus 2010

• Year-Over-Year Negative Fuel Price Impact of 1.7 Points

• GTMs Increased 5%

$2.24

Average Fuel Price (Per Gallon Consumed)

2010 2011

$3.18 +42%

261 277

2010

Fuel Consumption (Million Gallons)

2011

Barrel Price Conversion Spreads

+6%

13

25

Compensation & Benefits Third Quarter

2010

Inflation Volume (Net of

Productivity)

Training

2011

+ 5.5% + 1.5%

+ 0.5% $1,193

$1,092

+ 9%

Drought-

Related

Resources

+ 1.5%

26

Workforce Levels Third Quarter

2010

Base

Workforce

(Including Weather Impact)

Training Capital

Projects

2011

+ 2.5% + 1.5%

+ 1.0% 45,507

43,375

+ 5%

14

27

$465 $506

Third Quarter 2011 Expense Review In Millions

• Higher Property Taxes

• Increased Costs for Damaged

Freight and Equipment

2010

Purchased Services & Materials

2011

• Increased Contract Services

• Locomotive & Freight Car

Materials Usage

• Crew Lodging & Transportation

Costs

$178 $207

2010

Other

2011

+16%

+9%

28

$372 $408

Third Quarter 2011 Expense Review (cont) In Millions

• Ongoing Capital Spending

• Volume Driven - Higher

Expense

• Higher Container Lease

and Short-Term Car

Rental Expenses

• Lower Locomotive Lease

Expense

2010

Depreciation

2011

$292 $293

2010

Equipment & Other Rents

2011

+10%

Flat

15

29

Operating Ratio Performance Third Quarter

2008 2009 2010 2011

74.9 73.8

68.2 69.1

Operating Ratio (Pct) Third Quarter

• Solid Pricing

• Modest Volume Growth & Leverage

• Year-Over-Year Negative Fuel Price Impact of 1.7 Points

Full Year

• Improvement Excluding

Fuel Price Impact

Fuel Price Impact

30

Solid Financial Position Nine-Month Period Ending September 30 ($ In Millions)

• Record Cash from Operations and Free Cash Flow

• 39% Cash Dividend Increase YTD

• Targeted Dividend Payout Ratio of 30%

• Maintain Solid Investment Grade Rating

$1,009

$1,486 $438

$607

Free Cash Flow*

Total Debt* (Adjusted)

42.5% 41.4%

* See Union Pacific website under Investors for a reconciliation to GAAP.

Adjusted Debt to Capital

$1,447

$2,093 Before Dividends

After Dividends

9/30/2010 9/30/2011

YE 2010 9/30/2011

Dividends

$13,139 $13,095

16

31

Delivering Value to Shareholders

2007 2008 2009 2010 1Q 2Q 3Q

$1.46

$2.98 $2.98

$4.23 $4.48

$4.84

$5.27

Cumulative Share Repurchases ($ In Billions)

2011 Activity

• Opportunistic Share Repurchases

– 3Q 2011 = $428 Million

– YTD 2011 = $1.04 Billion

• 31.7 Million Shares Remaining in Current Authorization

2011

32

2011 Outlook

Continued

Volume

Growth

“Real”

Pricing

Gains

Ongoing

Productivity

Focus

Record

Earnings

Improved

Shareholder

Returns

17

33

Third Quarter Earnings Release October 20, 2011

Jim Young, Chairman & CEO

34

Union Pacific’s Prospects Remain Positive

• Continued Economic Uncertainties

• UP’s Prospects Remain Positive

• Confidence in Fundamental Strategy

– Enhance UP Franchise

– Provide Increased Value to Customers

– Improve Financial Returns to Shareholders

18

35

Cautionary Information

This press release and related materials contain statements about the Corporation’s future that are not statements of historical fact, including specifically the statements regarding the Corporation’s expectations with respect to its ability to generate returns for shareholders; current and future economic conditions; and its ability to enhance its franchise, provide value to its customers, and improve financial returns. These statements are, or will be, forward-looking statements as defined by the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements also generally include, without limitation, information or statements regarding: projections, predictions, expectations, estimates or forecasts as to the Corporation’s and its subsidiaries’ business, financial, and operational results, and future economic performance; and management’s 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 Corporation’s 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 Corporation’s 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 Corporation’s Annual Report on Form 10-K for 2010, which was filed with the SEC on February 4, 2011. 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.

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Third Quarter Earnings Release October 20, 2011

Question & Answer Session