Union Pacific Update

1
Union Pacific Update
January 26, 2007
2
Safety - Top Priority
Customer
Employee
Public
Reportable Incidents Per Million Train Miles
Crossing Accidents Per Million Train Miles
Reportable Injuries Per 200,000 Man-Hours
4.79
2.90
3.36
13
15
4.19
42
2.86
1.69
2001
2006
2001
2006
2001
2006
3
Houston Then Now
Good
AAR Velocity
Safety
Derailments
(MPH)
PI Incidents
Industry Spot/Pull
Terminal Dwell
(Hours)
4
Houston Then NowKey initiatives
Local Customer Satisfaction Index

• Safety Process
• Unified Plan Power Plan
• Flow Control
• Project Houston
• Targeted Capital

5
Project HoustonNetwork Regional Management
Initiatives

• Unified Plan Results
• Balanced traffic flows workload
• Reduced terminal cross-hauls by 75
• Eliminated 300 car handlings
• Locomotive balance
• Lean Initiative Results
• Consistent terminal process
• Flow control
• Control limits / recoverability
• Locomotive utilization
• CIMS Implementation

6
Railroading Is Capital IntensiveAverage Capital
Spending as a Percent of Revenue
1995 2004 Data Selected Industry Data
7
Capital Spending In Millions
3,200
2,860
2,800
2,393
2,127
1,955
1,942
1,867
1,850
1,700
2001
2002
2003
2005
1998
1999
2000
2004
2006 Est
2007 Potential
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Capital Allocation
Capital Investment Safety - Thruput
- Growth - Maintainability
Capital Investments
2007 Capital Plan (MM)
( Millions)
Maintenance of Way 1,500 Locomotives
677 Capacity 550 Commercial Facilities 195 Freigh
t Cars 125 Info Tech 90 Safety All Other
63 Total Capital 3,200
Includes Cash Capital and Lease Financings
2007 Planned Resource Additions Locomotives
300 Units Freight Cars
1,300 Cars TEY Workforce 2,336 People
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Maintainability

• Key Issues
• Rising Gross Ton Miles
• Increased Train Density
• Catch-up On Legacy Roads

• Strategies
• Maintenance Planning Techniques
• On-Track Productivity
• Improved Track Components
• Concrete Composite Ties
• Premium Rail
• Off-Track Maintenance Equipment

10
2007 Capital Projects

• Key Capacity Additions
• Sunset Double Track / LA Basin
• Tucson / Yuma Terminals
• San Antonio Terminal Facilities
• TP Route - CTC sidings
• Shreveport Gateway
• San Antonio Houston Corridor
• Houston Terminal Facilities
• Strang / Angleton Terminals
• Salt Lake City Grant Tower
• PRB Joint Line / Bill Yard
• North Platte Terminal - 3MT
• Nebraska / Iowa CTC
• Chicago Gateway

Portland
Chicago
Mason City
Bill
Clinton
North Platte
Salt Lake City
Denver
St. Louis
Kansas City
Los Angeles
Yuma
Ft. Worth
Red Rock
Shreveport
El Paso
Tucson
Houston
San Antonio
Angleton
11
5-Year Growth OpportunityTrains per Day
Portland
Powder River Basin
Chicago
Oakland
St Louis
Memphis
Trains / Day Growth 2010 Outlook
Los Angeles
gt 25 11- 25 5 - 10 1 - 4
Houston
12
Growth Challengeby Business Team
of Total Growth 2006 - 2011
Sample Operating Implications
2011 70 - 80 43 - 45 86 - 90
172 - 177
2006 51 36 72
150 8,340 2,789 22,360
Volume Sunset Rte Trns/Day PRB - Daily
Loads PRB - Tot UP Trns/Day No. Platte to
Gibbon Resources Locomotives 1st Crew
Starts Active TEY
9,100 - 9,800 3,290 - 3,420 25,400 -
26,050
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Updated Five Year OutlookMajor Constrained
Corridor and Terminal Areas
I-5 Corridor
Seattle
Eastport
Portland
Duluth
Powder River Basin
Central Corridor
Twin Cities
Chicago
Omaha
SLC
Oakland
KC
N. Platte
Denver
St. Louis
Line
Terminal
Memphis
LA
Dallas
Ft. Worth
Calexico
Nogales
El Paso
San Antonio
Houston
New Orleans
Eagle Pass
Sunset Corridor
Laredo
Brownsville
Texas Gulf
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Sunset Corridor Southeastern Gateways

• Key Issues
• Competitive Advantages
• Large Growth Opportunity
• Capacity / Capital Needs

Los Angeles
Phoenix
Ft. Worth/Dallas
El Paso
Calexico
Tucson
Nogales
San Antonio
Eagle Pass
Laredo

• Strategies
• Capital - Balance Line Terminals
• Premium Design Operation
• Terminal Process Rates
• Incident / Response Reduction
• Integrated Commercial Strategy

Brownsville
Sunset Trains per Day
70-80
9 CAGR
50
32
2006
2011
1998
15
Sunset CorridorProcess Improvements
Unplanned Incidents Incidents/Month
Terminal Processes/CIMS Phoenix Complex
Good
538
45
Daily Terminal Inventory
14 Reduction
22.3
451
39
Good
17.3
Terminal Dwell (Hrs)
2005 YTD
2006 YTD
2005 YTD
2006 YTD
Pipeline Design Operation
Pipeline Design Operation of Trains gt 2.0
HPT
99.0
81
Train Plan Compliance
78
Good
95.7
69
25.6
19.9
Daily Work Events
2005 YTD
2006 YTD
Q4 2004
Q2 2005
Q2 2006
16
Texas Gulf Coast
Ft. Worth/Dallas

• Key Issues
• Complex Network / Alternatives
• Terminal Intensive
• Gateways / Mexico
• Rock Network Impact

New Orleans
San Antonio
Houston
Eagle Pass
Laredo
Brownsville

• Strategies
• Process Improvements
• Manifest Design Standard
• Targeted Capital
• Gateway Management

Houston SU Car Dwell
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Commuter Rail Considerations

• Safety Issues
• Freight Rail Capacity
• Freight Movements
• Finances
• Planning

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Thank You!!!