Union Pacific Reports Third Quarter 2017 Results

Third Quarter Diluted Earnings per Share up 10 percent

FOR IMMEDIATE RELEASE

Third Quarter Results

· Diluted earnings per share of $1.50 increased 10 percent.

· Operating income totaled $2.0 billion, up 3 percent.

· Operating ratio of 62.8 percent, up 0.7 points.

Omaha, Neb., Oct. 26, 2017 – Union Pacific Corporation (NYSE: UNP) today reported 2017 third quarter net income of $1.2 billion, or a $1.50 per diluted share. This compares to $1.1 billion, or $1.36 per diluted share, in the third quarter 2016.

“During the quarter, our company faced the unprecedented challenge of Hurricane Harvey,” said Lance Fritz, Union Pacific chairman, president and chief executive officer. “I want to thank the men and women of Union Pacific who worked tirelessly and heroically to quickly and safely restore our network and operations from the storm and related flooding. Given these challenges, I am pleased with our results and look forward to continuing to build on the foundation provided by our six-track value strategy.”

Third Quarter Summary

Operating revenue of $5.4 billion was up 5 percent in the third quarter 2017 compared to the third quarter 2016. Third quarter business volumes, as measured by total revenue carloads, declined 1 percent compared to 2016. Volume increases in industrial products were more than offset by declines in agricultural products, automotive, chemicals and coal. Intermodal volume was flat compared to 2016. In addition: · Quarterly freight revenue improved 4 percent compared to the third quarter 2016, as increased fuel surcharge revenue, core pricing gains and positive mix of traffic all contributed to the increase.

· Union Pacific’s third quarter operating ratio of 62.8 percent increased 0.7 points compared to the third quarter 2016. Higher fuel prices negatively impacted the operating ratio by 0.3 points.

· The $1.77 per gallon average quarterly diesel fuel price in the third quarter 2017 was 13 percent higher than the third quarter 2016.

· Quarterly train speed, as reported to the Association of American Railroads, was 25.4 mph, 2 percent slower than the third quarter 2016.

· The year-to-date reportable personal injury rate of 0.78 per 200,000 employee-hours increased from the record year-to-date rate of 0.77 achieved in 2016.

· Union Pacific repurchased 11.8 million shares in the third quarter 2017 at an aggregate cost of nearly $1.3 billion.

· Included in the third quarter results are the following previously disclosed items:

EPS Impact

Operating Ratio Impact

Favorable / (Unfavorable)

Workforce Reduction Charge

($0.06)

(1.55) pts

Hurricane Harvey Impact

($0.04)

(0.75) pts

Illinois State Income Tax Adjustment

($0.04)

N/A

Land Sale

$0.04

N/A

Resolution of a Litigation Matter

$0.05

N/A

Summary of Third Quarter Freight Revenues

· Automotive down 3 percent

· Agricultural Products down 2 percent

· Coal down 2 percent

· Chemicals up 2 percent

· Intermodal up 3 percent

· Industrial Products up 26 percent

2017 Outlook

“As the economy continues to ebb and flow, we will focus on executing our value strategy. We will use innovation to enhance our customer experience while continuing to drive resource productivity throughout the organization as we progress our G55 + 0 initiatives,” Fritz said. “Looking ahead to 2018, our engaged team is laser focused on building upon our recent success. Our goal is to continue creating long-term enterprise value for all of our stakeholders as we improve our top-line and progress toward our margin improvement targets.”

Third Quarter 2017 Earnings Conference Call

Union Pacific will host its third quarter 2017 earnings release presentation live over the Internet and via teleconference on Thursday, October 26, 2017 at 8:45 a.m. Eastern Time. The presentation will be webcast live over the internet on Union Pacific’s website at www.up.com/investor. Alternatively, the webcast can be accessed directly through the following link. Participants may join the conference call by dialing 877/407-8293 (or for international participants, 201/689-8349).

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. In the past 10 years, 2007-2016, Union Pacific invested approximately $34 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.

Union Pacific Investor contact: Mike Staffenbeal at 402-544-4227 or mstaffen@up.com Union Pacific Media contact: Raquel Espinoza at 402-544-5034 or respinoza@up.com