Union Pacific Reports Best-Ever Quarterly and Full Year Results

OMAHA, NEB., JANUARY 23, 2014 Union Pacific Corporation (NYSE: UNP) today reported net income of $1.2 billion, or $2.55 per diluted share, for the fourth quarter 2013 compared to $1 billion, or $2.19 per diluted share, in the fourth quarter 2012. Best-Ever Quarterly Records Diluted earnings per share of $2.55 improved 16 percent. Operating revenues totaled more than $5.6 billion, up 7 percent Operating income totaled $1.97 billion, up 14 percent. 2013 Full Year Records Diluted earnings per share of $9.42 improved 14 percent. Operating revenues totaled $21.96 billion, up 5 percent. Operating income totaled $7.4 billion, up 10 percent. Operating ratio of 66.1 percent improved 1.7 points. "For the first time in six quarters, we reported overall volume growth, despite significantly weaker coal shipments. It highlights the strength of our diverse franchise, the extensive network reach we have to various markets, and a strong grain harvest," said Jack Koraleski, Union Pacific chief executive officer. "Volume growth, combined with solid core pricing gains and our continued focus on safety, service, and efficiency, generated a record fourth quarter operating ratio of 65.0 percent. The fourth quarter wrapped up another tremendous year for Union Pacific, with our overall financial performance exceeding all previous milestones." Fourth Quarter Summary Operating revenue increased 7 percent in the fourth quarter 2013 to more than $5.6 billion versus $5.25 billion in the fourth quarter 2012. Fourth quarter business volumes, as measured by total revenue carloads, grew 2 percent compared to 2012. Volume growth from agricultural products, automotive, industrial products and intermodal shipments more than offset declines in coal and chemical volumes. In addition: Quarterly freight revenue increased 7 percent compared to the fourth quarter 2012, driven by core pricing gains and volume growth. Union Pacific's operating ratio of 65.0 percent was a fourth quarter record, 2.1 points better than the fourth quarter 2012 and only 0.2 points off the all-time quarterly record of 64.8 percent set in the third quarter 2013. Average quarterly diesel fuel prices decreased 4 percent to $3.11 per gallon in the fourth quarter 2013 compared to $3.25 per gallon in the fourth quarter 2012. The Customer Satisfaction Index of 93 matched the fourth quarter record set in 2012. Quarterly train speed, as reported to the Association of American Railroads, was 25.8 mph, down 3 percent from the fourth quarter 2012, primarily due to severe winter weather conditions. The Company repurchased more than 4.9 million shares in the fourth quarter 2013 at an average share price of $159.36 and an aggregate cost of $786 million. Summary of Fourth Quarter Freight Revenues Agricultural up 19 percent Automotive up 17 percent Industrial Products up 14 percent Chemicals up 3 percent Intermodal flat Coal down 1 percent 2013 Full Year Summary For the full year 2013, Union Pacific reported net income of $4.4 billion or $9.42 per diluted share. This compares to $3.9 billion or $8.27 per diluted share in 2012, 11 and 14 percent increases, respectively. Operating revenue totaled a record $21.96 billion versus $20.9 billion in 2012. Operating income increased 10 percent to more than $7.4 billion, up from $6.7 billion in 2012. In addition: Freight revenue grew 5 percent to $20.7 billion compared to $19.7 billion in 2012. Carloadings were flat versus 2012 as declines in coal and agricultural shipments offset volume growth from automotive, chemicals, and industrial products shipments. Intermodal volumes were flat compared to 2012. Union Pacific's operating ratio of 66.1 percent was a full year record, improving 1.7 points from the previous record set in 2012. Average diesel fuel prices decreased 2 percent to $3.15 per gallon in 2013 from $3.22 per gallon in 2012. The Company increased its quarterly dividend per share by 14.5 percent to $0.79 cents per share in the third quarter 2013. Total dividends declared for the full year 2013 grew 19 percent compared to the full year 2012. The Company repurchased more than 14.5 million shares in 2013 at an average share price of $152.52, and an aggregate cost of $2.2 billion. 2014 Outlook "As we look at 2014, we see signs that the economy is slowly strengthening. We're well-positioned for economic growth and are confident in our ability to deliver on our customers' growing transportation needs," Koraleski said. "We'll continue our unrelenting focus on both safety and service to our customers. We strongly believe in the power and potential of the Union Pacific franchise to drive even greater financial performance and shareholder returns in the years to come." About Union Pacific Union Pacific Railroad is the principal operating company of Union Pacific Corporation (NYSE: UNP). One of America's most recognized companies, Union Pacific Railroad connects 23 states in the western two-thirds of the country by rail, providing a critical link in the global supply chain. From 2007-2013, Union Pacific invested more than $21.6 billion in its network and operations to support America's transportation infrastructure. The railroad's diversified business mix includes Agricultural Products, Automotive, Chemicals, Coal, Industrial Products and Intermodal. Union Pacific serves many of the fastest-growing U.S. population centers, operates from all major West Coast and Gulf Coast ports to eastern gateways, connects with Canada's rail systems and is the only railroad serving all six major Mexico gateways. Union Pacific provides value to its roughly 10,000 customers by delivering products in a safe, reliable, fuel-efficient and environmentally responsible manner. Investor contact is Michelle Gerhardt, (402) 544-4227. Media contact is Stephanie Serkhoshian, (402) 544-0100.

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