Union Pacific Reports Second Quarter Results

Second Quarter Diluted Earnings per Share down 3 Percent

FOR IMMEDIATE RELEASE

Second Quarter Results

 Diluted earnings per share of $1.38 declined 3 percent.
 Operating income totaled $1.9 billion, down 11 percent.
 Operating ratio of 64.1 percent, up 0.6 points.

Omaha, Neb., July 23, 2015 – Union Pacific Corporation (NYSE: UNP) today reported 2015 second quarter net income of $1.2 billion, or $1.38 per diluted share, compared to $1.3 billion, or $1.43 per diluted share, in the second quarter 2014.

“Solid core pricing gains were not enough to overcome a significant decrease in demand,” said Lance Fritz, Union Pacific president and chief executive officer. “Total volumes in the second quarter were down 6 percent, led by a sharp decline in coal. Industrial products and agricultural products also posted significant volume decreases. However, we made meaningful progress right sizing our resources to current volumes, and I am encouraged to report that we made these improvements while posting strong safety performance.”

Second Quarter Summary

Operating revenue of $5.4 billion was down 10 percent in the second quarter 2015 versus the second quarter 2014. Second quarter business volumes, as measured by total revenue carloads, declined 6 percent compared to 2014. Volume declines in coal, industrial products, and agricultural products more than offset the growth in automotive and intermodal. Chemicals volume was flat compared to 2014 as growth in base chemicals carloads offset a decline in crude oil shipments. In addition:

 Quarterly freight revenue decreased 10 percent compared to the second quarter 2014, as the volume decline, lower fuel surcharge revenue, and negative business mix more than offset core pricing gains.
 Union Pacific’s 64.1 percent operating ratio was 0.6 points worse than the second quarter 2014. The operating ratio benefited just under a point from the net impact of lower fuel prices in the quarter.
 Other income of $142 million increased $120 million compared to the second quarter 2014. Included in this amount is the previously announced Fremont, California, land sale, which contributed $113 million to pre-tax income, or 8 cents per diluted share to total earnings.
 The $1.99 per gallon average quarterly diesel fuel price in the second quarter 2015 was 36 percent lower than the second quarter 2014.
 Quarterly train speed, as reported to the Association of American Railroads, was 24.6 mph, about 3 percent faster compared with the second quarter 2014.
 The Company repurchased almost 8.0 million shares in the second quarter 2015 at an aggregate cost of $834 million.

Summary of Second Quarter Freight Revenues

 Automotive up 3 percent
 Chemicals down 1 percent
 Intermodal down 5 percent
 Agricultural Products down 7 percent
 Industrial Products down 14 percent
 Coal down 31 percent

2015 Outlook

“While the volume outlook remains uncertain, we remain laser focused on operating safely and efficiently no matter what the market environment. We will continue to reduce costs and improve productivity as we further align resources with demand,” Fritz said. “Longer term, we continue to be optimistic about the strengths of our diverse rail franchise.”

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 2005-2014, Union Pacific invested more than $31 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.