Second Quarter 2009 Highlights

• Operating income totaled $751 million, down 19 percent.
• Net income declined 12 percent to $468 million.
• On-going efficiency and pricing gains contributed to a record second quarter operating ratio of 77.3 percent.
• Average quarterly diesel fuel prices decreased 56 percent to $1.57 per gallon.
• Customer Satisfaction Index of 87 tied a quarterly best, up 4 points.

Union Pacific Corporation (NYSE: UNP) today reported 2009 second quarter net income of $468 million, or $0.92 per diluted share, compared to $531 million, or $1.02 per diluted share for the second quarter 2008. Included in the second quarter 2009 net income is $72 million, or $0.14 per diluted share, related to a June land sale to Colorado’s Regional Transportation District.

“Union Pacific produced solid second quarter results despite a business environment that continues to be extremely challenging,” said Jim Young, Union Pacific chairman and chief executive officer. “This performance demonstrates our unrelenting focus on safety, productivity and customer service, which helped drive lower costs and improved returns."

Second Quarter Summary

The continued weak global economy affected all six of Union Pacific’s business groups. Second quarter 2009 operating revenues totaled $3.3 billion versus $4.6 billion in the second quarter 2008. In addition:

• Business volumes, as measured by total revenue carloads, were down 22 percent versus the second quarter 2008. Reflecting lower volumes, year-over-year freight revenues declined 28 percent to $3.1 billion in the second quarter 2009. Lower fuel surcharge revenue in the second quarter, down over $500 million year-over-year, contributed to this decline.
• Quarterly diesel fuel prices decreased 56 percent from an average of $3.60 per gallon in the second quarter 2008 to an average of $1.57 per gallon. The second quarter 2009 fuel consumption rate, measured by gallons per thousand gross ton-miles, declined 6 percent to a quarterly best rate of 1.142.
• Second quarter 2009 operating ratio improved 2.3 points to 77.3 percent, in part as a result of the Company’s on-going efficiency initiatives and pricing gains. Union Pacific’s ongoing safety performance contributed about 1 point to the quarterly operating ratio improvement. A semi-annual actuarial study identified continued safety improvements and lower estimated settlement costs, resulting in a $38 million casualty expense reduction year-over-year.
• Union Pacific’s Customer Satisfaction Index improved 4 points to 87, matching the Company’s best quarterly mark.
• Quarterly train speed, as reported to the Association of American Railroads, was 27.4 mph, up nearly 5 mph or 20 percent versus the second quarter 2008. This improvement reflected productivity and operational improvements as well as lower volumes.
• In June 2009, the Company closed a land sale to Colorado’s Regional Transportation District, resulting in a $116 million pre-tax gain, adding $72 million to net income.

Summary of Second Quarter Freight Revenues

• Agricultural was down 21 percent.
• Energy was down 22 percent.
• Intermodal was down 23 percent.
• Chemicals was down 24 percent.
• Industrial Products was down 39 percent.
• Automotive was down 54 percent.

Outlook

“Although we expect it will be some time before the economy recovers, it appears that volume levels may have hit the bottom as the economy seems to have stabilized,” Young said. “Despite these economic challenges, we are dedicated to running a safe and productive network, maintaining our competitive advantages that come from excellent customer service and being a fuel efficient and an environmentally friendly railroad."

Non-GAAP Reconciliation

The second quarter 2009 adjusted net income of $396 million and diluted earnings per share of $0.78, which excludes the June land sale to Colorado’s Regional Transportation District, are non-GAAP measures. Management believes these measures provide an alternative presentation of results that more accurately reflect on-going Company operations, without the distorting effect of the land sale. These measures should be considered in addition to, not as a substitute for, net income and diluted earnings per share. The following table reconciles second quarter 2009 net income and diluted earnings per share, excluding the land sale, to net income and diluted earnings per share:

About Union Pacific

Union Pacific Corporation owns one of America’s leading transportation companies. Its principal operating company, Union Pacific Railroad, links 23 states in the western two-thirds of the country. Union Pacific serves many of the fastest-growing U.S. population centers and provides Americans with a fuel-efficient, environmentally responsible and safe mode of freight transportation. Union Pacific’s diversified business mix includes Agricultural Products, Automotive, Chemicals, Energy, Industrial Products and Intermodal. The railroad emphasizes excellent customer service and offers competitive routes from all major West Coast and Gulf Coast ports to eastern gateways. Union Pacific connects with Canada’s rail systems and is the only railroad serving all six major gateways to Mexico, making it North America’s premier rail franchise.

Supplemental financial information is attached.

Additional information is available at our Web site: www.up.com

Investor contact is Jennifer Hamann, (402) 544-4227.

Media contact is Donna Kush, (402) 544-3753.

This press release and related materials contain statements about the Corporation’s future that are not statements of historical fact, including specifically expectations regarding the Corporation’s outlook regarding economic conditions, future operating and safety performance, competitiveness of service and capital investments. 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 2008, which was filed with the SEC on February 6, 2009. 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 Web site are provided for convenience and, therefore, information on or available through the Web site is not, and should not be deemed to be, incorporated by reference herein.

Union Pacific Corporation
Jennifer Hamann, 402-544-4227 (Investors)
Donna Kush, 402-544-3753 (Media)