Fourth Quarter Earnings Release

Jim Young, Chairman & CEO

January 22, 2009

2

Fourth Quarter Results

2007

$0.93

Diluted Earnings per Share Operating IncomeIn Millions

2008

$1.31 $1,141+ 41% + 32%

$864

2007 2008

3

2008 – A Strong Year

Overcame Numerous Obstacles

Consistent Execution of Long-Term Strategy

Safe Transportation

Excellent Customer Service

Efficiency Gains

Strategic Investments

Increased Shareholder Returns

Fourth Quarter Earnings Release

Jim Young, Chairman & CEO

January 22, 2009

Fourth Quarter Earnings Release

Jack Koraleski, Executive VP – Marketing & Sales

January 22, 2009

6

Intermodal

Agricultural

Chemicals

Automotive

Industrial

Energy

TOTAL

Fourth Quarter Recap

-12%

-15%

-14%

-1%

-26%

-5%

-16%

Volume Revenue

+2%

-3%

-1%

+20%

-17%

+10%

-7%

7

Agricultural ProductsFourth Quarter - $792 Million

Quarterly Drivers

Whole Grains Volume Softens

Growth in Ethanol & DDGS

Additional Produce Railexpress Train

Grain Products

41%

Whole Grains

36%

Food/ Refrigerated

23%

Revenue Mix

Volume ARC Revenue

(%)

10

16

-5

Quarterly Drivers

Reduced Vehicle Production

8

AutomotiveFourth Quarter - $305 Million

Auto Parts 23%

Finished Vehicles

77%

Revenue Mix

Volume RevenueARC

(%)

-26

12

-17

Quarterly Drivers

Residual Hurricane Impact

Weak Demand Across Major Market Segments

Growth in Sulfur and Soda Ash

9

ChemicalsFourth Quarter - $578 Million

Revenue Mix

Plastics 19%

Liquid & Dry Chemicals

23%Soda Ash

19%

Petroleum & Other

25%

Fertilizer 14%

Volume RevenueARC

(%)

-14

15

-1

Quarterly Drivers

Strong Demand and Improved Network Performance Drive SPRB Growth

Production Issues Impact Colorado Mines

10

EnergyFourth Quarter - $983 Million

Colorado/ Utah 22%

SPRB 70%

Other 8%

Revenue Mix

Volume RevenueARC

(%)

-1

22 20

11

Industrial ProductsFourth Quarter - $717 Million

Quarterly Drivers

Economic Weakness Impacts Most Segments

Growth in Energy-Related Commodities

Paper 15%

Lumber 15%

Metals 24%

Construction Products

18%Gov’t/Waste/ Machinery

9%Minerals/

Consumer 19%

Revenue Mix

Volume RevenueARC

(%)

-15

14

-3

12

IntermodalFourth Quarter - $705 Million

Quarterly Drivers

Weak Economy Impacts International and Domestic

EMP Revitalization Boosts Growth with Intermodal Marketing Companies

International 58%

Domestic 42%

Revenue Mix

Volume RevenueARC

(%)

-16

10

-7

131313

Customer Satisfaction Index

Good

2006 2007 2008

72

79

83

Full YearGood

Q1 Q2 Q4

81

83

85

Quarterly

83

Q3

14

Legacy Opportunity

Total Percent of Revenue

As of 1/1/2009

Percent of Legacy Revenue

Re-Priced

82% since

2004

<1%3%

6%

2%

7%

2009

2010

2011

2012

2013+ Energy

50%

Intermodal

29%

Autos

10%

Chemicals

10%

Industrial Products

& Agricultural 1%

What We Think We Know …

15

Negative Pressure

Tough Comparisons in Ag

and Energy

Whole Grains Volume Closer

to 2007 Levels, Soybean

Crush Declines

Autos and Construction:

Have We Hit The Bottom?

Further Plastics Softening

Import Decline Continues

Opportunity to Improve

Ethanol Growth and 2009

Harvest

Automotive Extended

Shutdowns End

Fertilizer for Spring Planting

Colorado/Utah Coal

Production Recovery

EMP Revitalization

Fourth Quarter Growth in

Imports

2006

2009 Volume

Uncertain Demand Forecast

January YTD 20%

2009 Core Price

+5 to 6%

2009 OutlookMore Questions Than Answers

16

20072008

Jan 2009

Average 7-Day Carloadings (000s)

160

180

200

JunJan Dec

~~

Fourth Quarter Operating Review

Dennis Duffy, Executive VP – Operations

January 22, 2009

18

Safety- “Zero Tolerance”

Employee

Public

Customers

54% Improvement

29% Improvement

41% Improvement

Personal Injury Incidents Per 200,000 Man-Hours

Incidents Per Million Train Miles

Crossing Accidents Per Million Train Miles

01 02 03 04 05 06 07 08

01 02 03 04 05 06 07 08

01 02 03 04 05 06 07 08

21.4 21.8

23.522.0 22.3

25.14th Quarter

PerformanceFull Year

19

AAR Train Speed

69

76

8474

79

894th Quarter

Service Delivery Index (SDI)*

* Includes Early Deliveries

Customer Service

Commitments

Unified Plan

Inventory Management

Volume Variable

Distributed Power

Train Size

2006 2007 2008

2006 2007 2008

10.5

9.8

9.4

Productivity

Train Size and Starts

4th Quarter

9% Fewer Total Train Starts

9% Lower GTMs

Full Year 2008

6% Fewer Total Train Starts

3% Lower GTMs

Fuel

Operating Productivity Council

20

Manifest Train Size

77

80

82

2006 2007 2008

Freight Car UtilizationCycle Days

2006 2007 2008

• Manifest train starts decreased by 16%

between 2006 and 2008

Good

Good

21,950

18,062

8,721

7,200

Resource UpdateYear-End

21

Locomotives TE&Y Employees

3,150

Furloughed

* Represents Year–End Levels Minus Extra Resources

308,300

240,993

AAR Inventory

1,200+

Stored

48,000

Stored

2007 2008 2007 2008

2007 2008

22

2009 Capital InvestmentsReplacement, Growth and Productivity

Replacement /Renewal

Programs

Safety

Velocity

Throughput

Long Term Growth Projects

Sunset /Intermodal

Coal Capacity/Red X

Enhance Throughput

Productivity

$2.8 Billion Capital PlanIn Millions

Engineering Replacement

$1,800

Locomotives/Equipment

$400

Capacity/ Commercial

Facilities $450

Technology/

Other $150

Replacement

Growth and Productivity

232323

2009 Operating Plan

Safety Leadership

Excellent Service

Volume Variability

Operating Productivity Council

Asset Utilization

Capital Discipline

Fourth Quarter Financial Review

Rob Knight, CFO

January 22, 2009

252525

Operating Revenues

Freight Revenues $ 4,080 $ 3,988

Other Revenues 206 209

Total Operating Revenues $ 4,286 $ 4,197

Operating Expenses

Compensation and Benefits 1,101 1,121

Fuel 732 903

Purchased Services & Materials 458 456

Depreciation 353 337

Equipment & Other Rents 320 333

Other 181 183

Total Operating Expenses $ 3,145 $ 3,333

Operating Income $ 1,141 $ 864

Income Statement Summary*Fourth Quarter – In Millions

2008 2007 %

* For more information on reclassified financials, please see Union Pacific Web site.

2

(1)

2

(2)

(19)

Flat

5

(4)

(1)

(6)

32

262626

Freight Revenue DriversFourth Quarter – In Millions

2007 2008

$3,988

+2%$4,080

-12% Carloads

+6% Core Pricing Gains

2 Month Lag Drives Increased Fuel Cost Recovery

Positive Business Mix Adds 6 Points to Average Revenue Per Car

272727

Compensation & BenefitsFourth Quarter – In Millions

$1,121

2007 2008

$1,101

-2%

-9% GTMs

Labor Productivity

-4% Workforce

Wage and Benefit Inflation

2828

Fuel ExpenseFourth Quarter

Average Fuel PricePer Gallon Consumed

Fuel ConsumptionGallons (in millions)

20082007

$2.46$2.62

-9% GTMs Saved $77 Million

Impact of Fuel Conservation

Programs and Technology

Investments

20082007

333

289

292929

Purchased Services & MaterialsFourth Quarter – In Millions

$456

2007 2008

$458Flat

Component Cost Inflation

Volume and Productivity Savings

Less crew transportation and lodging

Lower intermodal ramp expense

3030

-4%

30

Equipment and Other ExpenseFourth Quarter – In Millions

$333

2007 2008

$320

Equipment

Lower Car Hire Payments

Reduced Locomotive Lease Expense

Equipment and Other Rents

Other Expense

-1%

Other

4th Quarter Specific Items Pressured Costs

$65M Casualty Expense Reduction

2007 2008

$183 $181

313131

Operating Ratio Improvement

79.4

2007 2008

73.4

-11.9 Pts

2006

85.3

2005

79.6

(%)

Fourth Quarter

79.3

2007 2008

77.3

-9.5 Pts

2006

86.8

2005

81.5

(%)

Full Year

323232

Full Income StatementFourth Quarter – In Millions (Except EPS)

Operating Revenues $ 4,286 $ 4,197

Operating Expenses 3,145 3,333

Operating Income $ 1,141 $ 864

Other Income – Net 25 40

Interest Expense (127) (125)

Income Before Income Taxes 1,039 779

Income Tax Expense (378) (288)

Net Income $ 661 $ 491

Diluted EPS $ 1.31 $ 0.93

2008 2007 %

2

(6)

32

(38)

2

33

31

35

41

333333

Full Income StatementFull Year – In Millions (Except EPS)

Operating Revenues $ 17,970 $ 16,283

Operating Expenses 13,895 12,908

Operating Income $ 4,075 $ 3,375

Other Income – Net 92 116

Interest Expense (511) (482)

Income Before Income Taxes 3,656 3,009

Income Tax Expense (1,318) (1,154)

Net Income $ 2,338 $ 1,855

Diluted EPS $ 4.54 $ 3.46

2008 2007 %

10

8

21

(21)

6

22

14

26

31

343434

Cash Management

Cash From Operations

2007

$3,277

2008

$4,070

2007 2008

$878

$1,249

Year-End Cash Balance

+24%

+42%

3535

Capital Update$Billions

35

2008

Cash & Non Cash Capital

Long Term Operating & Capital Leases

$2.6$2.8~~

2009 Estimate

$2.6$2.8

$2.8

$3.1

$2.8

IT / Other

$141

363636

Share Repurchase Program

Fourth Quarter Purchases

3.4 Million Shares

$199M Returned to Shareholders

2008 Repurchase Summary

22.2 Million Shares Repurchased

$1.5B Returned to Shareholders

25.2

2007 2008

$3.0 Billion Returned to

Shareholders since

January 2007

47.4

Fourth Quarter 2008 Purchases

Cumulative Prior Period Purchases

373737

Total Debt Levels 2008 - In Billions

2007

$12.3

* See Union Pacific Web site under Investor Relations for a reconciliation to GAAP.

44.1%

Adjusted Total Debt ($Billions)*

Adjusted Debt to Capital*

Solid Credit Access

Upcoming Debt Maturities

$250M on 2/15/09

47.4%

$13.9

2008

3838

Economic Uncertainty

+5 to 6% Core Price

Ongoing Productivity Gains

38

A Look At 2009

Fourth Quarter Earnings Release

Jim Young, Chairman & CEO

January 22, 2009

40

2009 – Challenging Ourselves

A Very Difficult Year

Safety Commitment

Service Excellence

Strategic Capital Investment

Performance Driven

4141

Cautionary InformationThis 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 performance, ability to make, and plans for, strategic investments, and 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: expectations as to continued or increasing demand for rail transportation services; expectations regarding operational improvements, including the effectiveness of network management initiatives that have been or will be implemented to improve operations, customer service, and shareholder returns; expectations as to increased returns, cost savings, revenue growth, and earnings; expectations regarding fuel price and our ability to mitigate fuel costs; the time by which certain objectives will be achieved, including expected improvements in operations and implementation of network management initiatives; estimates of costs relating to environmental remediation and restoration; proposed new products and services; expectations that claims, lawsuits, environmental costs, commitments, contingent liabilities, labor negotiations or agreements, or other matters will not have a material adverse effect on our consolidated financial position, results of operations, or liquidity; statements concerning projections, predictions, expectations, estimates or forecasts as to the Corporation’s and its subsidiaries’ business, financial, and operational results, and future economic performance; and statements of 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 2007, which was filed with the SEC on February 28, 2008. 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.

Fourth Quarter Earnings Release

Question & Answer Session

January 22, 2009