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Deutsche Bank Global Industrials & Basic Materials Conference
Rob Knight, CFO – June 13, 2012
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Cautionary Information
This presentation and related materials contain statements about the Corporation’s future that are not
statements of historical fact, including specifically the Corporation’s outlook regarding: economic conditions and growth
opportunities; future safety and operating performance; future capital investments; and its ability to generate volume
leverage, increase returns to shareholders, and attract new business. 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 2011, which was filed with the SEC on February 3, 2012. 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 website are provided for convenience
and, therefore, information on or available through the website is not, and should not be deemed to be, incorporated by
reference herein.
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81.6 79.3
76.1
70.6 70.7
$1.90
$2.94 $3.44
$4.53
$3.74
$5.53
$6.72
Financial Trends
EPS Operating Ratio (%)
7 Day Volume
6.4%
8.2% 8.8%
10.2%
8.2%
10.8%
12.4% ROIC (%)*
86.9
2006 2007 2008 2009 2010 2011 2005 2006 2007 2008 2009 2010 2011 2005
2006 2007 2008 2009 2010 2011 2005
Free Cash Flow*
$0.2
$0.5 $0.5
$0.8 $0.7
$1.4
$1.9 (billions)
2006 2007 2008 2009 2010 2011 2005
* See Union Pacific website under Investors for a reconciliation to GAAP.
77.4
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2010 2011 2012
$1.01
$1.29
$1.79
Best-Ever First
Quarter
First Quarter 2012 Results
+39%
Earnings Per Share Positives
• First Quarter Records
– Operating Revenue*
– Operating Income
– Operating Ratio
– Earnings
– Safety*
– Customer Satisfaction*
• Franchise Diversity
Challenges
• Coal Volumes
* Best-ever Quarterly Record 2010 2011 2012
75.1 74.7
70.5
Operating Ratio (%)
Best-Ever First
Quarter
(4.2) pts
3
5
Portland
Los Angeles
Calexico
Seattle
Brownsville
Houston New Orleans
Twin Cities
Nogales El Paso
Duluth
Oakland Omaha
Denver Salt Lake City
Kansas City
Chicago
Memphis
St. Louis
Fastest Growing States
Ports
Borders & Interchange
To/From
Asia
To/From
Asia
To Europe,
South America
and Africa
Industrial
16%
Agricultural
19%
Chemicals
15%
Eagle Pass
Laredo
Dallas
Eastport
Intermodal
20%
Energy
22% Autos 8%
Industrial
17%
Agricultural
18%
Chemicals
15%
Freight Revenue FY 2011 of $18.5B
• Diverse Business Mix
• Fastest Growing States
• Broad Port Access
• Interchange Traffic & Border Crossings
The Strength of a Unique Franchise
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Mexico Opportunities Strong Investments – Foreign and Domestic
*Estimation by Mexico’s Secretary of Economy
Ferromex (FXE)
KCSM
Ferrosur (FSRR)
UP Interchange Points
New Industrial Investment
2005 2006 2007 2008 2009 2010 2011
708 764 776 743
600
750 817
Volume Growth (Carloads in Thousands)
7% Volume Growth
in 1Q 2012
+9%
Ports
Recent Announcements
from Audi & Unilever
~ $2.5B Investment*
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Coal Trends
Southern Powder River Basin
74%
Other 13%
28,000
32,000
36,000
40,000
44,000
48,000
Volume Impact (Weekly Carloadings)
1Q 4Q
2011
2Q 3Q
– Mild Winter Weather
– Low Natural Gas Prices
– 1Q 2012 Contract Losses
+ New Business in 2012
+ Higher Export Volumes
45
50
55
60
65
70
75
80
85
20
25
30
35
40
45
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Inventory
Inventory
(days)
2011
Southern Powder River Basin (Trains Per Day and Monthly Inventory Days*)
2012
(through
June 9)
2012
SPRB
Trains/Day
*Energy Ventures Analysis, Inc.
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5,000
7,000
9,000
11,000
13,000
15,000
17,000 Automotive
2010
Jan Dec
2011
2009
2012
• Continued Growth in
Shale Crude Oil
• Lower Fertilizer
Volumes
• Continued Growth in
U.S. Auto Sales
• Aging Vehicles
• Drilling Demand
Drives Non-Metallic
Minerals and Steel
• Iron Ore Exports to
China
7 Day Volume Trends Through May 31, 2012
12,000
14,000
16,000
18,000
20,000
22,000 Chemicals
2010
Jan Dec
2011
2009
15,000
17,000
19,000
21,000
23,000
25,000 Industrial Products
2010
Jan Dec
2011
2009
2012
2012
2012 YTD up 15% 2012 YTD up 9% 2012 YTD up 9%
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2012 YTD Volume Drivers Through May 31, 2012
Shale Related
Vehicles & Parts
Domestic Imdl
Ind Chem & Plastics
Wheat Hazard Waste
Coal Other
40 33
11
(16) (18)
(103)
26
Petroleum
Nonmetallic Minerals
Carload Growth vs. 2011 55 YTD Volumes (000s):
2012 3,701
2011 3,673
Variance 28
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North American Shale Plays
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Global Demand for Energy
Integrated Strategy
• Crude Oil
• Frac Sand
• Minerals
• Steel
• Pipe
0
200
400
600
2010 2011 2012 2013 2014 2015
Crude Sand/Minerals Pipe
Potential Volume Growth (Carloads In Thousands)
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St. James
Livonia
US Development Group
• Current phase of expansion completed in
4Q 2011.
• Total off-loading capacity: 130,000 bpd
• Connected to storage terminal (7MM
barrel capacity) and pipeline network
NuStar Energy / EOG Resources
• Expansion completion by 2Q 2012
• Total off-loading capacity after
completion: 100,000 bpd
• Storage Capacity: 8MM barrels
Leveraging the Franchise Louisiana – Growth
Customer Facilities
Crude Oil Facilities
Plant Expansions / New Facilities
Shintech
(Expansions)
Georgia Gulf
(Expansion)
SNF Holding Co.
(New Facility)
New Orleans
Petroplex International LLC
• Recently announced new $600MM oil-
storage terminal in St. James
• Capacity of 4 – 6MM barrels
• Operational in 2014
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Fuel Cost Comparisons 1st Quarter 2012
$/MMBTU*
U.S. Chemical Cost Advantage Driving Global Competitiveness
*Brent Oil Price converted at the energy content basis (6.02 barrels per MMBTU)
Source: U.S. Energy Information Administration; IHS Chemical; McKinsey
Brent Crude U.S. Natural Gas
$19.79
$2.44 0%
50%
100%
North America
Middle East
South America
Europe Russia Asia
Natural Gas Crude
2011 Global Feedstock Sources
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Shreveport
Ft. Worth
Dallas
Houston New
Orleans
San
Antonio
Brownsville
Ethylene Plants
New Plant/Expansions
Expanding Chemical Franchise Texas/Louisiana Investments
Formosa Plastics Corp.
• >$1.7 Billion investment in cracker
and additional capacity projects.
• Cracker capacity: 800,000 mt/year
• Estimated completion in 2016
Dow Chemical Co.
• $1.7 Billion investment in cracker
and additional capacity projects.
• Total capacity: 1.5 million mt/year
• Estimated completion in 2017
Chevron Phillips Chemical Co.
• $5 Billion investment in cracker &
additional capacity projects.
• Total capacity: 1.5 million mt/year
• Estimated completion in 2017
Gruppo Mossi & Ghisolfi
• Investment in new PET & PTA plants.
• Capacity: 1.0 & 1.2 million mt/year
• Estimated completion in 2014
Source: Public Announcements
Exxon Mobil Corp.
• Investment in steam cracker.
• Total capacity: 1.5 million mt/year
• Estimated completion in 2016
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2012 YTD* up 2%
45,000
49,000
53,000
57,000
61,000
65,000
69,000
73,000
Intermodal Trends
• Growing Domestic
Volumes & Highway
Conversions
• Lower International
Volumes
Domestic & International (Year-over-Year Volume Growth)
UP Intermodal Volumes (7 Day)
Jan Dec
2010
2011
2009
1Q11 2Q11 3Q11 4Q11 1Q12
1% 0% 2%
3%
6% 6%
-2%
-12%
-7%
-3%
International
Domestic
*Through May 31, 2012
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Panama Canal Impact Seattle/
Tacoma
14 Days*
LA/Long
Beach
13 Days*
NJ/ NY
27 Days*
Norfolk
28 Days*
Savannah
29 Days*
Favors
West
Coast
Coast
Neutral
Favors
East
Coast
Panama
Canal *Average transit days from Shanghai
• Most Freight Favors the West Coast
– Time-Sensitive Freight
• Cost of Panama Canal Expansion
• East Coast Investments Required
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Housing Trends
Lumber, Stone & Glass
*Through May 31, 2012
0.0
0.5
1.0
1.5
2.0
2.5
0
2,000
4,000
6,000
8,000
10,000
12,000
2004 2012* 2006 2008 2010
UP Wkly Housing Carloadings
Housing Starts (mils) • Housing represents ~7%
of current UP volumes
• Lumber, Stone & Glass down 3,500 carloads a week, a 2% total volume growth opportunity
• Including Chemicals & Intermodal, total volume growth opportunity could be 6 - 7%
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Pricing Gains and Opportunities
2007 2008 2009 2010 2011 1Q2012
6.0% 6.0%
4.5%
5.0%
4.5%
5.0%
Core Pricing Gains
2013 $350M 2015+
$500M
2014 $100M
*Based on freight revenue for 12-months ended December 31, 2010
Remaining Legacy*
Coal ~85%
All Other ~15%
Legacy Contracts as of Jan 2012 ($950 Million Remaining)*
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2006 2007 2008 2009 2010 2011 2015E
81.6
79.3 77.4
76.1
70.6 70.7 192 190
180
152
172
177
Operating Ratio Trend
Operating Ratio (Percent)
7-Day Volume (000s)
65 - 67
Targeting a 65% to 67%
Full Year Operating
Ratio by 2015
11 point improvement from 2006 to 2011
Fuel Price
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2012 Capital Plan Replacement, Growth & Productivity
• Safe and Resilient
Infrastructure
• Increased Capacity
Spending
– Santa Teresa Facility
– Southern Region Projects
• 200 New Locomotives
• Increased PTC Spend
$3.6+ Billion Capital Plan (In Millions)
Infrastructure Replacement
$1,670
Locomotives/ Equipment $845
(purchases and upgrades)
Capacity/ Commercial
Facilities $600
Technology
$100
PTC $335
Growth and Productivity Replacement PTC
$625
$220
Other
$50
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2005 2006 2007 2008 2009 2010 2011 2012
$2.8 $2.7
$3.0 $3.1
$2.5 $2.5
$3.2
~$3.6
6.4%
8.2% 8.8%
10.2%
8.2%
10.8%
12.4%
Investments and Returns
Total Capital Spending* (In Billions)
* Includes cash capital, leases and other non-cash capital. ** See Union Pacific website under Investors for a reconciliation to GAAP.
Return on Invested Capital**
PTC
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2007 2008 2009 2010 2011
2007 2008 2009 2010 2011 1Q12
25.3
47.5 47.5
64.1
78.9 82.7
Delivering Value to Shareholders
Cumulative Share Repurchases (millions)
• Declared Dividend Increase of 58% in 2011
‒ Currently @ $2.40 per share on Annualized Basis
‒ Targeted Declared Payout Ratio of 30%
• Opportunistic Share Repurchases
‒ $1.4 Billion in 2011
‒ $433 Million in 1Q 2012
• Combined Cash returned to shareholders since 2007 = $9.2B
Annual Dividends
$0.75 $0.98 $1.08 31%
$1.31 21%
47%
10%
$1.93
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Total Shareholder Return
Average Annual Total Return*
Time Frame** UP S&P 500
15 Yrs 10.1% 4.8%
10 Yrs 15.5% 4.6%
5 Yrs 15.7% (0.4%)
3 Yrs 29.4% 14.5%
1 Yr 13.3% 5.9%
* Assumes dividends are reinvested in company stock
** Periods ending June 8, 2012
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Positioned for Success
• Growth Opportunities Despite Coal Headwinds
• Second Quarter 2012
– Record 2Q Earnings
– Strong Incremental Margin Consistent with First Quarter
– Sub-70 Operating Ratio
• Targeting Record FY 2012 Earnings and Operating Ratio
• Confidence in Strategy
– Increase Customer and Shareholder Value
– Enable Continued, Strategic Investments