Cautionary Information

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1 February 13, 2019 Stifel 2019 Transportation & Logistics Conference Rob Knight CFO 1 Cautionary Information This presentation and related materials contain statements about the Company s future that are not statements of historical fact, including specifically the statements regarding the Company s expectations with respect to economic conditions; its ability to generate financial returns, improve resource productivity and use innovation to enhance customer experience; implementing corporate strategies; and providing excellent service to its customers and returns to its shareholders. These statements are, or will be, forward-looking statements as defined by the Securities Act of 1933 and the Securities Exchange Act of Forward-looking statements also generally include, without t limitation, information or statements regarding: projections, predictions, expectations, estimates or forecasts as to the Company 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 Company 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 Company 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 Company s Annual Report on Form 10-K for, which was filed with the SEC on February 8, The Company 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 availableon, thedatethe statements were made. The Company 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 Company does update one or more forward-looking statements, no inference should be drawn that the Company 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. 2

2 Full Year Results Earnings Per Share Operating Ratio $13.36 $ % $ pts Reported Adjusted* Reported Adjusted* *Adjusted to exclude the impact of Corporate Tax Reform. See Union Pacific website under Investors for a reconciliation to GAAP. 3 Key Drivers Overall Volume up 4% Pricing Dollars Well Exceeded Inflation Dollars Positive Productivity, Partially Offset by Network Inefficiencies Focused on G55+0 Initiatives, Including Unified Plan

3 2019 Business Trends Energy Agricultural Premium Industrial QTD Volumes* (vs ) -5% -4% TOTAL +4% +8% +9% January 7-Day Monthly Carloadings (000s) December * Through February 11, Petroleum LPG Coal Coal Sand Petroleum LPG Sand* 14% Other Coal / Coke 16% Energy Revenue $4.6 B Petroleum, LPG & Renewables 16% PRB Volume Coal** Mix 54% * Sand includes Barites ** PRB includes SPRB and NPRB 6

4 Export Produce Dairy, Poultry Produce Dairy Dairy Cattle Potash Cattle, Poultry Major, Products, & Fertilizer Region Cattle, Poultry Products 28% Agricultural Products Revenue $4.5 B Fertilizer 18% Volume Mix Food & Beverage 18% Export Export 36% 7 Premium Revenue $6.6 6 B Domestic* 51% Automotive Distribution Centers Intermodal Terminals Key Intermodal and Automotive Ports Key Intermodal and Automotive Border Crossings, Gateways and Interchanges Other 1% Finished Vehicles 10% Volume Mix International Intermodal 38% * Domestic includes domestic intermodal and auto parts moved in intermodal containers 8

5 Lumber, Paper Soda Ash Steel Industrial Revenue $5.7 B Copper, Iron Ore, Salt, Lime and Other Minerals Pipe, Cement, Aggregates Lumber, Paper Soda Ash Specialized 7% Plastics 16% 11% Volume Mix Construction 23% Forest Products 14% Network and Regional Manifest Terminals Major Transload Terminals Gulf Coast Infrastructure Metals 11% Industrial Chemicals 18% 9 Calexico Mexicali Dallas Nogales Nogales Ciudad Juárez El Paso Guaymas Topolobampo Hermosillo Chihuahua Torreón San Antonio Houston Piedras Eagle Pass Negras Nuevo Laredo Laredo Brownsville Saltillo Matamoros Monterrey New Orleans Mexico Revenue $2.5 B Ferromex KCSM Ferrosur Short Lines UP Intermodal Operations UP Offices Durango Mazatlán Aguascalientes Silao Guadalajara Manzanillo Lazaro Cardenas San Luis Potosi Toluca Querétaro Mexico City Altamira Tampico Salina Cruz Veracruz Puebla Coatzacoalcos Progresso Premium 64% Ag. Products 17% Energy 7% Volume Mix Industrial 12% Ciudad Hidalgo 10

6 Unified Plan 2020 Update Phase I Implementation Began October 1 st Implementation Underway for Phase 2 Phase 3 Planning Started January 28 th Full Implementation by Mid-2019 Unified Plan 2020 Phases Phase 1: Mid-America Phase 2: Sunset & LA-Chicago Phase 3: PNW, Nor Cal & I5 11 Unified Plan 2020 Key Performance Indicators Freight Car Velocity (Daily Miles per Car) Full Year Record +10% +/- Sep Jan Year-End Operating Inventory % +/- Sep Jan Year-End 8.0 Cars per Carload (Operating Inventory / Daily Carloads) % +/- Faster Car Cycle Time Fewer Cars Online Reduced Terminal Dwell Sep Jan Year-End * Based on October 24, 7-day averages as reported during 3Q earnings release 12

7 Unified Plan 2020 Key Performance Indicators Locomotive Productivity (GTMs per Horsepower Day) Car Trip Plan Compliance (% Cars On Time) % - 10% 73% +15 +/- pts. 61% Sep Jan Year-End Workforce Productivity (Daily Car Miles per FTE) % +/- Sep Jan Year-End Sep Jan Year-End ~1,500 Locomotives Removed From Active Fleet Since Aug 18 Fewer Manifest Service Issues Seasonality Affecting Workforce Productivity * Based on October 24, 7-day averages as reported during 3Q earnings release 13 Strengthening the Franchise Replacement, Growth & Productivity, and PTC 2019 Capital Plan: ~$3.2 Billion ($ in Millions) Capacity/ Commercial Facilities $585 Safe & Resilient Infrastructure Equipment Acquisitions Locomotive Modernizations Infrastructure Replacement $1,880 Technology/ Other $300 Locomotives/ Equipment $345 PTC $115 Targeted Freight Car Acquisitions Capacity & Commercial Targeted Opportunities Intermodal Growth Lower PTC Spending 14

8 Cash Flow & Debt $ In Millions Cash From Ops $7, % $8,686 ROIC* +1.4 pts. 15.1% 13.7% Higher Net Income, Lower Federal Tax Payments Improved ROIC As of: Adjusted Debt* $25,118 $17,390 $17,878 $19, $14, /31/14 12/31/15 12/31/16 12/31/17 12/31/18 Adjusted Debt / EBITDA Increased Adj. Debt $5.6 Billion since Year-End Includes $6 Billion Debt Offering in June Adj Debt / EBITDA of 2.3 * See Union Pacific website under Investors for a reconciliation to GAAP 15 Delivering Value to Shareholders $ In Millions Dividends $1,982 Share Repurchases $2,299 $8,225 ASR $4,013 $3,600 Cash Returned to Shareholders $5.8 ($ In Billions) $5.0 $6.0 $4,625 $ Cash Returned to Shareholders Dividends: id d $2.3 Billion Two, 10% dividend increases in Share Repurchases: $4.6 Billion of Open Market Purchases $3.6 Billion Accelerated Share Repurchase Program 16

9 2019 Financial Outlook Volume Up Low Single Digits Pricing Will Exceed Inflation Dollars Significant Benefits from G55 + 0, Including Unified Plan 2020 At Least $500 Million of Productivity in 2019 Operating Ratio Guidance: Sub-61% in 2019 Below 60% by 2020 Capex of ~$3.2 Billion in 2019; Less than 15% of Revenue Going Forward 17