Exhibit 99.1

UNION PACIFIC REPORTS RECORD FOURTH QUARTER AND FULL YEAR

FOR IMMEDIATE RELEASE

All-Time Quarterly Records

 

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Diluted earnings per share of $1.99 improved 28 percent.

 

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Operating revenue grew to $5.1 billion, up 16 percent.

 

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Operating income totaled $1.6 billion, up 23 percent.

2011 Full Year Records

 

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Diluted earnings per share of $6.72 improved 22 percent.

 

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Operating revenue grew to $19.6 billion, up 15 percent.

 

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Operating income totaled $5.7 billion, up 15 percent.

 

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Return on invested capital of 12.4 percent improved 1.6 points.

 

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Customer satisfaction index reached 92, up 3 points.

Omaha, Neb., January 19, 2012 – Union Pacific Corporation (NYSE: UNP) today reported 2011 fourth quarter net income of $964 million, or $1.99 per diluted share, compared to $775 million, or $1.56 per diluted share, in the fourth quarter 2010.

“The dedicated efforts of our employees, combined with the strength of our diverse railroad franchise, drove record fourth quarter results,” said Jim Young, Union Pacific chairman and chief executive officer. “In 2011, we achieved best-ever marks in customer satisfaction and employee safety, invested a record $3.2 billion in capital, and generated record free cash flow of $1.9 billion. 2011 was the most profitable year in Union Pacific’s history, allowing us to reward shareholders with increased financial returns.”

 

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Fourth Quarter Summary

Fourth quarter business volumes, as measured by total revenue carloads, grew 3 percent versus 2010. Four of Union Pacific’s six business groups—chemical, automotive, energy and industrial products—reported strong volume increases. Quarterly operating revenue increased 16 percent in the fourth quarter 2011 to a record $5.1 billion versus $4.4 billion in the fourth quarter 2010. In addition:

 

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Each of UP’s six business groups reported freight revenue growth in the fourth quarter driven by increased fuel cost recoveries and core pricing gains. Volume growth was also a contributing factor in four of the six business groups.

 

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Union Pacific’s operating ratio of 68.3 percent was a fourth quarter best, 1.9 points better than the previous fourth quarter record set in 2010. Pricing gains, volume growth and improved operating efficiency contributed to this record performance, more than offsetting the negative impact of higher diesel fuel prices compared to 2010.

 

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Average quarterly diesel fuel prices increased 28 percent to $3.16 per gallon in the fourth quarter 2011 from $2.46 per gallon in the fourth quarter 2010.

 

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The Customer Satisfaction Index of 92 tied a quarterly best and was two points better than the fourth quarter 2010.

 

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Quarterly train speed, as reported to the Association of American Railroads, was 25.6 mph, decreasing 3 percent compared to the fourth quarter 2010.

 

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The Company repurchased nearly 3.9 million shares in the fourth quarter 2011 at an average share price of $98.16, and an aggregate cost of $381 million.

 

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Summary of Fourth Quarter Freight Revenues

 

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Automotive up 26 percent

 

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Industrial Products up 24 percent

 

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Energy up 21 percent

 

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Chemicals up 18 percent

 

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Intermodal up 13 percent

 

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Agricultural up 2 percent

2011 Full Year Summary

For the full year 2011, Union Pacific reported net income of $3.3 billion or $6.72 per diluted share. This compares to $2.8 billion or $5.53 per diluted share in 2010, 18 and 22 percent increases, respectively. Operating revenue totaled a record $19.6 billion versus $17.0 billion in 2010. Operating income increased 15 percent to $5.7 billion, up from $5.0 billion in 2010.

 

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All six business groups reported freight revenue growth and five of the six business groups reported volume growth in 2011. Carloadings increased 3 percent versus 2010 and freight revenue grew 15 percent to $18.5 billion. This compares to freight revenue of $16.1 billion in 2010.

 

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UP’s operating ratio in 2011 was 70.7 percent, one-tenth of a point higher than the previous annual record of 70.6 percent set in 2010. Higher fuel prices negatively impacted the operating ratio by 1.7 points compared to 2010.

 

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Average diesel fuel prices increased 36 percent to $3.12 per gallon in 2011 from $2.29 per gallon in 2010.

 

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The Company increased the quarterly dividend per share twice during 2011, for a total increase of 58 percent for the year.

 

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The Company repurchased nearly 14.8 million shares in 2011 at an average share price of $95.94, and an aggregate cost of $1.4 billion.

2012 Outlook

“Looking ahead, we expect continued slow but steady economic growth in 2012,” Young said. “The diversity of our unique railroad franchise will continue to provide growth opportunities in various markets. As we move into the 150^th year of Union Pacific, our prospects have never looked better. We remain focused on providing excellent service to our customers, investing for the future, and generating increased financial returns for our shareholders.”

About Union Pacific

It was 150 years ago that Abraham Lincoln signed the Pacific Railway Act of July 1,1862, creating the original Union Pacific. One of America’s iconic companies, today, Union Pacific Railroad is the principal operating company of Union Pacific Corporation (NYSE: UNP), linking 23 states in the western two-thirds of the country by rail and providing freight solutions and logistics expertise to the global supply chain. From 2000 through 2011, Union Pacific spent more than $31 billion on its network and operations, making needed investments in America’s infrastructure and enhancing its ability to provide safe, reliable, fuel-efficient and environmentally responsible freight transportation. Union Pacific’s diversified business mix includes Agricultural Products, Automotive, Chemicals, Energy, Industrial Products and Intermodal. The railroad serves many of the fastest-growing U.S. population centers and emphasizes excellent customer service. Union Pacific operates competitive routes 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.

Investor contact is Michelle Gerhardt, (402) 544-4227.

Media contact is Donna Kush, (402) 544-3753.

Supplemental financial information is attached.

 

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This press release and related materials contain statements about the Corporation’s future that are not statements of historical fact, including specifically the statements regarding the Corporation’s expectations with respect to its ability to take advantage of growth opportunities and generate returns for shareholders; future economic conditions; and its prospects for future performance. 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 2010, which was filed with the SEC on February 4, 2011. 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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UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Condensed Consolidated Statements of Income (unaudited)

 

Millions, Except Per Share Amounts and Percentages,		4th Quarter														Full Year
For the Periods Ended December 31,		2011				2010				%						2011				2010				%
Operating Revenues
Freight revenues		$	4,829			$	4,171				16	%				$	18,508			$	16,069				15	%
Other revenues			279				239				17						1,049				896				17
Total operating revenues			5,108				4,410				16						19,557				16,965				15
Operating Expenses
Compensation and benefits			1,155				1,112				4						4,681				4,314				9
Fuel			935				687				36						3,581				2,486				44
Purchased services and materials			508				467				9						2,005				1,836				9
Depreciation			413				380				9						1,617				1,487				9
Equipment and other rents			289				278				4						1,167				1,142				2
Other			191				173				10						782				719				9
Total operating expenses			3,491				3,097				13						13,833				11,984				15
Operating Income			1,617				1,313				23						5,724				4,981				15
Other income			54				9				F						112				54				F
Interest expense			(141	)			(142	)			(1	)					(572	)			(602	)			(5	)
Income before income taxes			1,530				1,180				30						5,264				4,433				19
Income taxes			(566	)			(405	)			40						(1,972	)			(1,653	)			19
Net Income		$	964			$	775				24	%				$	3,292			$	2,780				18	%
Share and Per Share
Earnings per share - basic		$	2.01			$	1.58				27	%				$	6.78			$	5.58				22	%
Earnings per share - diluted		$	1.99			$	1.56				28					$	6.72			$	5.53				22
Weighted average number of shares - basic			480.7				491.3				(2	)					485.7				498.2				(3	)
Weighted average number of shares - diluted			484.7				496.3				(2	)					489.8				502.9				(3	)
Dividends declared per share		$	0.60			$	0.38				58					$	1.93			$	1.31				47
Operating Ratio			68.3%				70.2%				(1.9	) pts					70.7%				70.6%				0.1	pts
Effective Tax Rate			37.0%				34.3%				2.7	pts					37.5%				37.3%				0.2	pts

 

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UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Freight Revenues Statistics (unaudited)

 

		4th Quarter														Full Year
For the Periods Ended December 31,		2011				2010				%						2011				2010				%
Freight Revenues (Millions)
Agricultural		$	854			$	840				2 %					$	3,324			$	3,018				10 %
Automotive			408				323				26						1,510				1,271				19
Chemicals			728				617				18						2,815				2,425				16
Energy			1,070				887				21						4,084				3,489				17
Industrial Products			810				652				24						3,166				2,639				20
Intermodal			959				852				13						3,609				3,227				12
Total		$	4,829			$	4,171				16 %					$	18,508			$	16,069				15 %
Revenue Carloads (Thousands)
Agricultural			236				248				(5)%						934				918				2 %
Automotive			171				155				10						653				611				7
Chemicals			232				211				10						921				844				9
Energy			558				519				8						2,164				2,056				5
Industrial Products			281				263				7						1,146				1,073				7
Intermodal *			817				841				(3)						3,254				3,313				(2)
Total			2,295				2,237				3 %						9,072				8,815				3 %
Average Revenue per Car
Agricultural		$	3,630			$	3,386				7 %					$	3,561			$	3,286				8 %
Automotive			2,378				2,100				13						2,311				2,082				11
Chemicals			3,131				2,923				7						3,055				2,874				6
Energy			1,917				1,709				12						1,888				1,697				11
Industrial Products			2,878				2,483				16						2,762				2,461				12
Intermodal *			1,175				1,012				16						1,109				974				14
Average		$	2,103			$	1,865				13 %					$	2,040			$	1,823				12 %

 

*	Each intermodal container or trailer equals one carload.

 

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UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Condensed Consolidated Statements of Financial Position (unaudited)

 

Millions, Except Percentages		Dec. 31, 2011				Dec. 31, 2010
Assets
Cash and cash equivalents		$	1,217			$	1,086
Other current assets			2,510				2,346
Investments			1,175				1,137
Net properties			39,934				38,253
Other assets			260				266
Total assets		$	45,096			$	43,088
Liabilities and Common Shareholders’ Equity
Debt due within one year		$	209			$	239
Other current liabilities			3,091				2,713
Debt due after one year			8,697				9,003
Deferred income taxes			12,385				11,557
Other long-term liabilities			2,136				1,813
Total liabilities			26,518				25,325
Total common shareholders’ equity			18,578				17,763
Total liabilities and common shareholders’ equity		$	45,096			$	43,088
Debt to Capital			32.4%				34.2%
Adjusted Debt to Capital*			40.7%				42.5%
Return on Invested Capital*			12.4%				10.8%

 

*	Adjusted Debt to Capital and Return on Invested Capital are non-GAAP measures; however, we believe that they are important in evaluating our financial performance. See pages 8 and 9 for a reconciliation to GAAP.

 

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UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Condensed Consolidated Statements of Cash Flows (unaudited)

 

Millions,		Full Year
For the Periods Ended December 31,		2011				2010
Operating Activities
Net income		$	3,292			$	2,780
Depreciation			1,617				1,487
Deferred income taxes			1,003				672
Other - net			(39)				(834)
Cash provided by operating activities			5,873				4,105
Investing Activities
Capital investments			(3,176)				(2,482)
Other - net			57				(6)
Cash used in investing activities			(3,119)				(2,488)
Financing Activities
Common shares repurchased			(1,418)				(1,249)
Dividends paid			(837)				(602)
Debt repaid			(690)				(1,412)
Debt issued			486				894
Debt exchange			(272)				(98)
Other - net			108				86
Cash used in financing activities			(2,623)				(2,381)
Net Change in Cash and Cash Equivalents			131				(764)
Cash and cash equivalents at beginning of year			1,086				1,850
Cash and Cash Equivalents End of Period		$	1,217			$	1,086
Free Cash Flow*
Cash provided by operating activities		$	5,873			$	4,105
Receivables securitization facility**			-				400
Cash provided by operating activities excluding receivables securitization facility			5,873				4,505
Cash used in investing activities			(3,119)				(2,488)
Dividends paid			(837)				(602)
Free cash flow		$	1,917			$	1,415

 

*	Free cash flow is a non-GAAP measure; however, we believe that it is important in evaluating our financial performance and measures our ability to generate cash without incurring additional financing.

 

**

Effective January 1, 2010, new accounting guidance required us to account for receivables transferred under our receivables securitization facility as secured borrowings in our Condensed Consolidated Statements of Financial Position and as financing activities in our Condensed Consolidated Statements of Cash Flows. The receivables securitization facility line in the above table is included in our free cash flow calculation to adjust cash provided by operating activities as though our receivables securitization facility had been accounted for under the new accounting guidance for all periods presented.

 

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UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Operating and Performance Statistics (unaudited)

 

		4th Quarter														Full Year
For the Periods Ended December 31,		2011				2010				%						2011				2010				%
Operating/Performance Statistics
Gross ton-miles (GTMs) (millions)			252,686				240,087				5 %						978,163				931,400				5 %
Employees (average)			44,922				43,462				3						44,861				42,884				5
GTMs (millions) per employee			5.62				5.52				2						21.80				21.72				-
Customer satisfaction index			92				90				2 pts						92				89				3 pts
Locomotive Fuel Statistics
Average fuel price per gallon consumed			$ 3.16				$ 2.46				28 %						$ 3.12				$ 2.29				36 %
Fuel consumed in gallons (millions)			286				270				6						1,106				1,051				5
Fuel consumption rate*			1.135				1.123				1						1.131				1.129				-
AAR Reported Performance Measures
Average train speed (miles per hour)			25.6				26.5				(3) %						25.6				26.2				(2) %
Average terminal dwell time (hours)			26.5				25.8				3						26.2				25.4				3
Average rail car inventory (thousands)			274.1				270.6				1						272.9				274.4				(1)
Revenue Ton-Miles (Millions)
Agricultural			21,949				23,976				(8) %						88,094				88,237				- %
Automotive			3,404				3,101				10						13,004				12,542				4
Chemicals			15,166				13,619				11						59,542				54,233				10
Energy			62,293				57,237				9						238,567				225,583				6
Industrial Products			16,971				14,840				14						66,823				60,347				11
Intermodal			19,641				20,001				(2)						78,367				79,458				(1)
Total			139,424				132,774				5 %						544,397				520,400				5 %

 

*	Fuel consumption is computed as follows: gallons of fuel consumed divided by gross ton-miles in thousands.

 

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UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Condensed Consolidated Statements of Income (unaudited)

 

		2011
Millions, Except Per Share Amounts and Percentages		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Full Year
Operating Revenues
Freight revenues		$	4,248			$	4,595			$	4,836			$	4,829			$	18,508
Other revenues			242				263				265				279				1,049
Total operating revenues			4,490				4,858				5,101				5,108				19,557
Operating Expenses
Compensation and benefits			1,167				1,166				1,193				1,155				4,681
Fuel			826				904				916				935				3,581
Purchased services and materials			475				516				506				508				2,005
Depreciation			395				401				408				413				1,617
Equipment and other rents			302				283				293				289				1,167
Other			188				196				207				191				782
Total operating expenses			3,353				3,466				3,523				3,491				13,833
Operating Income			1,137				1,392				1,578				1,617				5,724
Other income			15				26				17				54				112
Interest expense			(141)				(148)				(142)				(141)				(572)
Income before income taxes			1,011				1,270				1,453				1,530				5,264
Income tax expense			(372)				(485)				(549)				(566)				(1,972)
Net Income		$	639			$	785			$	904			$	964			$	3,292
Share and Per Share
Earnings per share - basic		$	1.31			$	1.61			$	1.87			$	2.01			$	6.78
Earnings per share - diluted		$	1.29			$	1.59			$	1.85			$	1.99			$	6.72
Weighted average number of shares - basic			489.6				488.4				484.2				480.7				485.7
Weighted average number of shares - diluted			494.1				492.4				488.1				484.7				489.8
Dividends declared per share		$	0.38			$	0.475			$	0.475			$	0.60			$	1.93
Operating Ratio			74.7	%			71.3	%			69.1	%			68.3	%			70.7	%
Effective Tax Rate			36.8	%			38.2	%			37.8	%			37.0	%			37.5	%

 

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UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Freight Revenues Statistics (unaudited)

 

						2011
		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Full Year
Freight Revenues (Millions)
Agricultural		$       807		$       849		$       814		$       854		$      3,324
Automotive		342		381		379		408		1,510
Chemicals		664		703		720		728		2,815
Energy		952		950		1,112		1,070		4,084
Industrial Products		690		803		863		810		3,166
Intermodal		793		909		948		959		3,609
Total		$    4,248		$    4,595		$    4,836		$    4,829		$    18,508
Revenue Carloads (Thousands)
Agricultural		238		237		223		236		934
Automotive		157		165		160		171		653
Chemicals		223		233		233		232		921
Energy		538		496		572		558		2,164
Industrial Products		263		297		305		281		1,146
Intermodal *		770		819		848		817		3,254
Total		2,189		2,247		2,341		2,295		9,072
Average Revenue per Car
Agricultural		$    3,386		$    3,580		$    3,655		$    3,630		$      3,561
Automotive		2,175		2,321		2,364		2,378		2,311
Chemicals		2,974		3,024		3,087		3,131		3,055
Energy		1,770		1,916		1,945		1,917		1,888
Industrial Products		2,628		2,697		2,832		2,878		2,762
Intermodal *		1,031		1,108		1,119		1,175		1,109
Average		$    1,941		$    2,045		$    2,066		$    2,103		$      2,040

 

*	Each intermodal container or trailer equals one carload.

 

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UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Non-GAAP Measures Reconciliation to GAAP

 

			$12,753				$12,753
Debt to Capital*
Millions, Except Percentages		Dec. 31, 2011				Dec. 31, 2010
Debt (a)		$	8,906			$	9,242
Equity			18,578				17,763
Capital (b)		$	27,484			$	27,005
Debt to capital (a/b)			32.4%				34.2%

 

*	Total debt divided by total debt plus equity. Management believes this is an important measure in evaluating our balance sheet strength and is important in managing our credit ratios and financing relationships.

 

			$12,753				$12,753
Adjusted Debt to Capital, Reconciliation to GAAP*
Millions, Except Percentages		Dec. 31, 2011				Dec. 31, 2010
Debt			8,906				9,242
Net present value of operating leases			3,224				3,476
Unfunded pension and OPEB			623				421
Adjusted debt (a)		$	12,753			$	13,139
Equity			18,578				17,763
Adjusted capital (b)		$	31,331			$	30,902
Adjusted debt to capital (a/b)			40.7%				42.5%

 

*

Total debt plus net present value of operating leases plus after-tax unfunded pension and OPEB obligation divided by total debt plus net present value of operating leases plus after-tax unfunded pension and OPEB obligation plus equity. Operating leases were discounted using 6.2% at December 31, 2011 and December 31, 2010. Management believes this is an important measure in evaluating the total amount of leverage in our capital structure including off-balance sheet obligations.

 

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UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES

Non-GAAP Measures Reconciliation to GAAP

 

Return on Invested Capital as Adjusted (ROIC)*
Millions, Except Percentages		Dec. 31, 2011				Dec. 31, 2010
Net income		$	3,292			$	2,780
Add: Interest expense			572				602
Add: Interest on present value of operating leases			208				222
Less: Taxes on interest			(293)				(307)
Net operating profit after taxes as adjusted (a)		$	3,779			$	3,297
Average equity		$	18,171			$	17,282
Add: Average debt			9,074				9,545
Add: Average value of sold receivables			-				200
Add: Average present value of operating leases			3,350				3,574
Average invested capital as adjusted (b)		$	30,595			$	30,601
Return on invested capital as adjusted (a/b)			12.4%				10.8%

 

*

ROIC is considered a non-GAAP financial measure by SEC Regulation G and Item 10 of SEC Regulation S-K, and may not be defined and calculated by other companies in the same manner. We believe this measure is important in evaluating the efficiency and effectiveness of the Corporation’s long-term capital investments, and we currently use ROIC as a performance criteria in determining certain elements of equity compensation for our executives. ROIC should be considered in addition to, rather than as a substitute for, other information provided in accordance with GAAP. The most comparable GAAP measure is Return on Average Common Shareholders’ Equity.

 

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